“Technology is the key to bridging the advice gap. Clients are already engaging with technology in their everyday lives and it is a natural starting point when looking for advice. However, this is not only where the advice process should launch from but also, with the right framework, where it should end.”
Mr Williams’ opinion largely mirrored the observations published in a White Paper by Egremont, the management consultancy. The paper, titled From Regulation to Innovation, called for advisers to take heart from Mr Wheatley’s call for a more simplified, mass market advice model in order to save their business models from extinction.
As consumers increasingly turn to digital channels for financial solutions, the report concluded that there had been a “power shift” that could not be ignored. The current “tick-box approach to regulatory compliance”, it added, was not benefiting anyone, and was essentially leading financial advisers to “indiscriminately” follow regulations ahead of putting the customer’s needs first.
But now that the regulatory body has seemingly softened its stance, the White Paper argued that opportunities were there for everybody to profit from changing market dynamics.
It added: “As the FCA has been at pains to emphasise recently this should not preclude financial services providers from making money. Provided that any products sold are a good and appropriate fit for the customer, organisations should feel free to innovate and get on with doing business.”
After issuing its guidance paper, Christopher Woolard, director of policy, risk and research at the FCA, said: “We want to ensure we have innovation in the advisory market and new, lower-cost options available. We aim to address some of the barriers that firms have identified to offering new, streamlined advisory products.”
Daniel Liberto is a former features writer of Financial Adviser
Key points
Martin Wheatley provoked plenty of backlash in May when voicing his concerns that the mass market was no longer being adequately serviced with financial advice
Unless the rules are made more lenient, automated advice would be difficult to deliver
As consumers increasingly turn to digital channels for financial solutions, there has been a “power shift” that can not be ignored.
