In what may widely be seen as a blow to insurance brokers, the Financial Conduct Authority (FCA) has announced plans to help insurance companies that hope to develop and adopt automated advice models.
The regulator aims to extend the scope of its Advice Unit this year, which provides regulatory feedback to firms developing automated models that seek to deliver lower cost advice to consumers. Its focus area includes fully or partly automated online services and other models that use technology.
“The Advice Unit, which currently assists firms developing automated advice models, will now have a broader remit, taking in firms within the mortgage, general insurance and debt sectors, as well as firms that want to provide guidance instead of regulated advice,” Christopher Woolard, executive director of strategy and competition at the FCA, said in a speech published on the regulator’s website.
According to criteria published on the FCA website, companies who wish to apply to the Advice Unit will have to show their potential to deliver lower cost advice to “unserved or underserved” consumers and provide “genuine consumer benefit.”
Firms that will be accepted by the FCA will get individual regulatory feedback, which could include an initial meeting with the Advice Unit and other specialist areas of the regulator to discuss the company’s proposition.