Out-Law News | 23 Jun 2016 | 10:07 am | 1 min. read
The group would focus its efforts on automated investment, pensions and protection advice products, as the three areas identified by FAMR as needing lower cost, innovative advice models, according to FCA director Christopher Woolard.
The comments came in a speech that Woolard was due to give at the Global Digital Banking Conference in London. The group will be based within the FCA's 'Project Innovate' innovation hub, which was set up to provide support and advice on how to meet regulatory challenges to new and established financial firms seeking to introduce innovative products and services to the market.
In his speech, Woolard said that the FCA had provided "direct support" to over 250 firms through Project Innovate since the project began in October 2014, as a result of more than 500 requests for support. Project Innovate has produced "genuinely meaningful results" and allowed firms to develop "genuinely innovative ideas likely to have customer benefit", he said.
"From the initial applicants we have 40 who have been authorised or who are close to becoming authorised and launching new products that may not have otherwise come to market, including very short-term insurance, new ways of assessing credit worthiness or raising funding," he said.
However, Woolard emphasised that these new products and any automated advice models that emerged from the revamped unit had to "meet the same standards" as traditional products and face-to-face advice. The responsibility for meeting the regulatory requirements "rests with each firm's senior management", he said.
"One we have taken a few firms through the [advice] unit, we will also look to share the lessons learned from these experiences in the form of tools and resources which will be publicly available to the whole industry," he said.
Separately, the FCA this week published terms of reference and announced the initial appointments to its Financial Advice Working Group, which has been set up to take forward three of the 28 recommendations of FAMR. The group, which is made up of consumer and industry experts from the FAMR Expert Advisory Panel, the Financial Services Consumer Panel, the FCA's own practitioner panels and financial firms, is due to report to the government on its progress after 12 months.
The working group will collaborate with employers on new guidance to support employees' "financial health", and develop a set of 'nudges' and 'rules of thumb' to encourage consumers to engage with their own financial decisions. It is also due to publish a shortlist of potential new terms to describe 'guidance' and 'advice' by the end of this year, which will be used to inform the possible new statutory definitions which are one of the central recommendations of FAMR, according to the terms of reference.