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The FCA's independence consultation: how will it affect you?

Experts from leading firms discuss what they think will be the outcome of the advice consultation.

Nick Hungerford, co-founder and CEO of Nutmeg

This does not mean much for Nutmeg directly but I I welcome this as Project Innovate sounds like a fantastic opportunity for start-up firms to get the regulator’s input and will allow us to have firms in this country that are confident regulation will not adversely affect their business model. There is a push to become a global centre for technological innovation and we can point to projects like this and say this is the place to start these businesses - I think we will see a number of start-ups.

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Jason Hollands, managing director at Bestinvest

It’s slightly nuanced but from what we can see there should not be a major impact on what we currently do. Clearly there is recognition from the FCA that the market has been nervous about investing because they do not want to cross the line between full advice and the guidance and sharing of information that investors need.

The regulator is trying to support an environment where innovation is not discouraged from filling the advice gap, and I think it’s going to be mostly about existing players making sure they develop their services. There have been a number of players coming in couple of years, such as Nutmeg, while people like us have been enhancing the functionality of our websites for non-advised investors.

The industry has been reasonably silo-driven, given that there have been plenty of firms focusing on providing wealth management to investors, and range of a [direct-to-consumer] businesses.

The gap in the market is for the supply of simplified advice - other firms are geared to the hobbyist market and equally everybody has been chasing the high net worth investor.

This is a step in the right direction, although clearly the paper has not come up with a definitive answer, they have just given us a framework through which to think about things.

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Danny Cox, head of financial planning, Hargreaves Lansdown

This consultation potentially paves the way for financial companies to develop innovative and efficient new ways to help investors make the most of their money. It is only a consultation at this stage, but we see this as a great opportunity to develop new online and smart device solutions which can fill some of the gap below the full regulated advice regime which exists today. We are still working through the details at this stage but we don’t see anything in the paper which is at odds with the tools and information which Hargreaves Lansdown currently uses to support our clients’ decision making.

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Rob Hudson, managing director, Charles Stanley Direct

“There is currently a service gap in the retail investment market and this can only ever be filled by digital or hybrid models. As a consultation paper, this is of assistance in highlighting the difference between various service options. It is very much up to the industry to potentially get involved in ‘Project Innovate’ and look to develop further high quality client services. Charles Stanley Direct, as one of the leading digital innovators in the market, is actively looking at digital solutions to fill the potentially growing advice-gap.”

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