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| Version 1 | Version 2 |
|---|---|
| Robo-money advice under the microscope | Robo-money advice under the microscope |
| (about 2 hours later) | |
| Computer algorithms that offer financial advice will be studied as part of a review into the money advice sector. | Computer algorithms that offer financial advice will be studied as part of a review into the money advice sector. |
| So-called robo-advice uses computers to help individuals find products that suit their finances and attitude to risk. | So-called robo-advice uses computers to help individuals find products that suit their finances and attitude to risk. |
| They are used relatively widely in the US. | They are used relatively widely in the US. |
| A consultation, starting on Monday, will see the Treasury and City watchdog take views about the cost of advice. | A consultation, starting on Monday, will see the Treasury and City watchdog take views about the cost of advice. |
| "There is lots of innovation going on already," said Tracey McDermott, acting chief executive of the Financial Conduct Authority (FCA). | "There is lots of innovation going on already," said Tracey McDermott, acting chief executive of the Financial Conduct Authority (FCA). |
| "We need to assess whether or not [robo-advice] can provide the services that people need, and to ensure that the regulatory and legal framework allows this to happen." | "We need to assess whether or not [robo-advice] can provide the services that people need, and to ensure that the regulatory and legal framework allows this to happen." |
| The suggestion is that automated robo-advice could allow people to make decisions without having to pay more for a dedicated financial adviser but some are worried that algorithms would not guide people adequately through their financial choices. | |
| Complexity | Complexity |
| The consultation is part of an inquiry that will consider consumers' access to financial advice, and particularly the gap for those who do not have significant wealth. | The consultation is part of an inquiry that will consider consumers' access to financial advice, and particularly the gap for those who do not have significant wealth. |
| It comes after the change in pension rules, which came into effect in April. | It comes after the change in pension rules, which came into effect in April. |
| The changes, allowing access to pension savings, has prompted questions about the suitability of advice. | The changes, allowing access to pension savings, has prompted questions about the suitability of advice. |
| The review will consider all types of retail financial products including pensions, savings, mortgages, and insurance. It will publish its findings before next year's Budget. | The review will consider all types of retail financial products including pensions, savings, mortgages, and insurance. It will publish its findings before next year's Budget. |
| Ms McDermott told the BBC that as people were living for longer, long-term financial decisions were becoming more complex. She said that many people needed to be encouraged to engage with money services for their long-term financial health. | Ms McDermott told the BBC that as people were living for longer, long-term financial decisions were becoming more complex. She said that many people needed to be encouraged to engage with money services for their long-term financial health. |
| Harriett Baldwin, economic secretary to the Treasury, said: "We are exploring what more can be done to make sure consumers can access high quality and affordable advice so they can make informed decisions with their hard-earned money." | Harriett Baldwin, economic secretary to the Treasury, said: "We are exploring what more can be done to make sure consumers can access high quality and affordable advice so they can make informed decisions with their hard-earned money." |
| Charities have said the review should have a wide remit. | |
| "The price and availability of products and services is important, but the review must also address gaps in people's knowledge and understanding of what help they can get with planning their finances, and how to access it," said Gillian Guy, chief executive of Citizens Advice. | |
| "The government, independent financial advisers, financial institutions, consumer bodies and charities should take this opportunity to work together to meet needs of consumers who want who want help to make the right decisions for their future." |