Roboadvice in the spotlight
By Teamspirit on Sunday, 3 June 2018
Automated advice firms have been placed under scrutiny in the FCA’s recent guidance paper criticising their governance practices.
The review, published last week, discovered failings in firms’ handling of suitability and disclosure. Out of the seven platforms investigated, the FCA found that firms did not make fees clear and lacked a ‘know your client’ focus – accusing them of failing to evaluate clients’ investment experience, knowledge and capacity for loss.
The FCA’s report only strengthens the case for clear communication in financial services. By their nature, financial services products are often complicated things. So transparency, honesty and an ability to cut the jargon are essential in the ways brands communicate – internally, with each other, and with customers.
Despite the scathing report, the FCA admitted that roboadvice is an evolving market. With a great number of supporters backing digital wealth management firms, it seems that although there is room for improvement they’re not going anywhere soon.