Financial planning app Multiply claims to be the first firm ever to offer fully regulated, automated holistic financial advice after its launch today.
The app plans to help address the financial advice gap with the launch of its service over this summer.
The company says it has undergone “stringent testing processes” over the last 18 months to achieve FCA approval.
It claims its technology is advanced enough to make complicated calculations based on an individual’s situation and deliver “suitable tailored recommendations”.
The free service has previously assisted self-employed people to build financial plans and will now be rolled out to people in the UK aged 18 to 50 who earn less than £250,000 a year.
Multiply suggests it will be the only app to automatically explore an individual’s whole financial life across a range of products including pensions, investments, savings and insurance.
The technology will consider timeline goals such as if a user plans to buy a property in the next couple of years.
Users of the app will be required to share their aims and objectives and financial situation to receive advice about the type of product and providers that will best support their needs.
The company claims the advice offered is “completely impartial” without “human bias”.
It said it tested 300 different scenarios and used external industry specialists and paraplanners to check and verify the results of the technology.
Multiply chief executive Vivek Madlani says: “We’re immensely proud to be the first company to receive FCA approval to automate the full advice process. At the moment the industry is going backward, the advice gap is widening.”
He adds: “It is extremely encouraging to see the FCA advice unit actively supporting ideas like ours. Their commitment to bringing innovative firms to market that will benefit consumers will see big societal issues like the advice gap tackled, and hopefully solved, sooner rather than later.”
Altus Consulting director of wealth Simon Bussy says the consultancy has been watching Multiply’s development with “great interest”.
He says: “In an extremely competitive marketplace, this development raises the bar, and moves the story on from the ‘linear-journey-into-an-in-house-portfolio’ investment proposition favoured by some digital wealth services to something broader, just as Pefin has in the United States.”
However, Bussy warns that Multiply will also face several challenges including developing the brand and attracting enough users.
Multiply will refer customers to a third-party solution and will receive a fee or commission for referrals or purchases.
It is supported by £1.75m in investment from Octopus Ventures, Portag3 Ventures LP and Entrepreneur First. Angel investors include Nick Hungerford, former chief executive of Nutmeg and Taavet Hinrikus, chief executive of TransferWise.
The FCA regulatory sandbox allows businesses to test innovative propositions in the market in a controlled environment with real consumers.
Multiply said it ran 100 live cases within the sandbox.