The FCA is to launch a dedicated robo-advice unit next month as it says it does not want to hold back progress ahead of recommendations from the advice review.
In a speech yesterday on the Financial Advice Market Review acting chief executive Tracy McDermott says the advice unit will help firms developing mass-market automated advice models to bring these to market “more quickly”.
She said the new unit will be open to firms of all sizes.
McDermott said: “The advice unit will support the development of automated advice tools that can help provide low-cost, high quality advice to mass-market consumers on investments, pensions and protection.”
Robo-advice was one area of focus for the Treasury and the FCA in the FAMR. One of the report’s key recommendations calls on the regulator to establish an advice unit to help firms build automated advice models.
McDermott said the project was being launched now because the FCA did not want to wait a year before seeing progress on the FAMR recommendations.
She said: “We, along with the Treasury, have set ourselves a series of milestones to ensure we retain focus on delivery of the FAMR objectives. However, we don’t want to wait 12 months before we can make progress.”
The FCA will initially be giving eligible firms feedback on how their advice models can meet regulatory requirements and expectations.
McDermott said: “We have done this in the past, but we want to make it clear that we want to offer this support more widely and make it more routine. And we want to ensure that other firms can benefit from what we learn about what works, and what doesn’t, as we got through this process.
“Later this year we will also be developing a set of tools and resources which will be publicly available to all firms. This might include a set of standardised testing scenarios for firms to use to gauge the effectiveness of their models.”