Lessons must be learnt from robo failings

Regulatory risk

Katrina Lloyd
clock • 2 min read

At the end of last year, the Financial Conduct Authority's (FCA) head of strategy and competition Bob Ferguson said robo-advice presents advisers with "big opportunities" if implemented correctly, but also warned of regulatory risk.

Opportunities include a boost to competition in the market through disruption and innovation, as well as helping to close the advice gap. However, Ferguson added different models pose different risks, and it was important firms managed them appropriately. Indeed, a poorly-designed model could lead to "systemic mis-selling", he cautioned. It seems advisers have been heeding these warnings, with nearly two thirds of 100 advisers interviewed for a Prudential survey at the end of 2017 expressing concerns robo-advice could bring regulatory or compliance issues. Brave new world: Should w...

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