Comprehensive Guide to Robo-Advisers: Benefits, Risks, and Regulatory Considerations in UK Financial Services


Produced in partnership with Kushal Gandhi and Charles Kerrigan of CMS
Practice notes

Comprehensive Guide to Robo-Advisers: Benefits, Risks, and Regulatory Considerations in UK Financial Services


Produced in partnership with Kushal Gandhi and Charles Kerrigan of CMS

Practice notes
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Automated financial product advisers or robo-advisers are automated computer systems that provide financial planning services with little or no human intervention. They are emerging across the financial service industry, helping consumers choose Investments, banking products and insurance policies.

This Practice Note considers the following:

  1. •

    Scope and uses of robo-advisers

  2. •

    Advantages and disadvantages

  3. •

    Risk creation versus risk mitigation

  4. •

    Regulatory framework

  5. •

    Recent FCA Reviews and Key Findings

  6. •

    Legal issues in relation to advice provided by robo-advisers

  7. •

    Views from the market

  8. •

    Next Phase of Robo-Advice

Artificial intelligence (AI) underpins robo-advice and provides an opportunity for financial institutions to develop business models in order to better meet the needs of clients. Banks are aware that they need to organise, analyse and use data to reshape business models. This is the potential of AI: offering a range of benefits from better client experience, efficient risk management and compliance through to operational efficiency. AI technology improves speed, accuracy and consistency.

As with most industries, banking clients’ expectations

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Jurisdiction(s):
United Kingdom
Key definition:
Model definition
What does Model mean?

Financial model used for undertaking financial viability testing, often referred to as a ‘toolkit’ appraisal.

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