A few months back there was a big fuss made about the FCA confirming technology could be used to deliver advice.
It was nothing new and anyone familiar with the regulations already knew this.
Regardless of the repeated calls for innovation, I don’t see the need for it. Not yet, anyway. There are more basic things to fix.
One example is simplified advice, which has not advanced because a Level 4 person is still needed and the bulk of a factfind is still necessary, meaning it is too expensive.
So, what about automating it?
To deliver simplified advice (or anything automated or heavily controlled) if you get one thing wrong, you’re getting it wrong for everyone.
The FCA is as risk-averse as it wants everyone else not to be. Anyone wishing to run this model at volume wants the explicit approval for it that the FCA refuses to give.
I understand why the regulator doesn’t want to do this, but I know from very early discussions on RDR among large financial institutions that the risk of regulatory sanction and a class action from clients was a barrier to even considering this further.
Calling for innovation is as futile as calling for evolution. It just happens or it doesn’t. In the meantime there are things that can be more directly controlled. Many businesses talking about innovation are in a mess. They are incapable of running their existing processes, never mind anything new.
Phil Young is managing director at threesixty
