The Financial Services Consumer Panel has published research and a position paper on the consumer experience with online investment and advice services (often called ‘robo’-advice).
The research, conducted for the Panel by Boring Money Ltd, concluded that many online investment firms failed to:
- Communicate clearly whether they were providing regulated advice or guidance;
- Disclose costs and charges in a way that allowed consumers to understand how much they would be paying and for what;
- State clearly whether consumers would have recourse to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) should things go wrong;
- Use language that consumers understood.
The research also found that consumers in the sample did not understand the difference between regulated advice and guidance.
The Panel recommends that:
- The FCA clarifies and enforces strongly existing rules designed to address the problems identified in the research, whether or not regulate