Advisers raise 'systemic mis-selling' risk of simplified advice models

Advice firms have raised fears over "systemic mis-selling" through simplified advice and said ongoing regulatory uncertainty has stifled market developments, according to the FCA.

The regulator's latest thematic review found many firms had not developed a simplified advice model due to concerns about suitability standards and fears over automated advice processes. It added advisers are also worried about mis-selling. "Firms are concerned that automated advice processes providing personal recommendations could result in systemic mis-selling if parts of the process produce unintended, unsuitable recommendations for certain groups of customers," the report explained. "This led many firms to include significant compliance and mis-selling liability costs within thei...