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Lloyds stalls robo-advice plans on FAMR uncertainty

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Lloyds Banking Group could reset its plans to launch an online investment service for retail clients as it awaits the next development in the FCA’s Financial Advice Market Review.

In January, Lloyds, Barclays, RBS and Santander were reportedly looking into launching online advice offerings as part of their return to the mass advice market.

However, only Santander has launched an online investment tool so far.

A Lloyds Bank spokesman says: “We are continuing to review the market following the FAMR final report, and are waiting to see the next stages of implementation of the recommendations made before we make any decisions.”

Currently, Lloyds doesn’t offer investment advice in branches to retail customers but said “products and services are continually under review”.

PwC director of wealth management Ian Woodhouse says for some banks the investments required to build propositions like robo-advice, “are too high”. He says some banks have then recently taken the decision “to pull back, exit or partner” to provide asset management and advice, refocusing back on their core banking activities.

Altus Consulting director Kevin Okell says banks would be in pole position to provide robo-advice because they have a wealth of customer data but have not yet “for fear of the regulator”.

He says: “Despite its apparently tech-friendly initiatives, the FCA still clings to an anachronistic view of how data is actually used in a digital age.

“In their FAMR final report, the regulator conceded that a portable electronic fact-find might be acceptable ‘provided a firm has processes in place to check with the client that the information is accurate and up-to-date’. This is very reminiscent of the man waving a red flag in front of the early motor car and suggests the FCA might be about as useful in the long term.”

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Comments

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  1. What a surprise – not!
    This great new advice panacea is rightly viewed as an unknown and unquantifiable risk.
    Having just set aside further squillions for PPP and goodness know what else, they are rightly wary of this new incarnation.
    No doubt the tecchies and software guys are going to be so disappointed. But I always thought that Robo advice in financial services was about as appropriate as Robo Advice for solicitors. It needs to be recognised that this is substantially a people business and automating clients like biscuit packets isn’t really appropriate.

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