Wealth manager Quilter has warned that consumers remain stubbornly wary of financial technology despite yesterday's FCA review of the advice sector suggesting that robo-advice could play a key role in closing the advice gap.

In its response to the FCA market review, Quilter said that the growth of financial scams during the Coronavirus pandemic has made people more wary than ever of using technology when it comes to their finances.

Sarah Waring, client and proposition director at Quilter, said: “It is clear that the UK remains behind markets like the US where the use of technology and AI is more advanced and they are moving away from the false dichotomy of face-to-face advice versus robo-advice. A hybrid form of advice is becoming increasingly common, which is something the UK will eventually embrace. That being said technology is clearly not the silver bullet.

"Although there is more awareness of automated advice services, rising from 10% of adults in 2017 to 19% in 2020, people remain wary.

"The explosion of financial scams during the Covid-19 period has made people more wary than ever. The FCA research showed that respondents were concerned that unknown brands might not survive in the market, or that they would have less robust security than the larger established firms. Technology is a great democratic power to allow services to reach a wider audience but we need to be cognisant that when it comes to their money people are very cautious.”

She also warned that there need to be clear boundaries established to allow for the provision of guidance if the industry is to learn from the experience of Pension Wise.

She said: “People are obviously trying to make good decisions but many are missing out on critical support unless we can create clear boundaries to allow for the provision of guidance, which experience of Pension Wise shows us is likely to augment advice and not threaten it.

“Approximately 750,000 people across the UK now retire each year. We know that now more than ever, people need the value that financial advice has to offer. A combination of Pension Freedoms, the Covid-19 pandemic, volatile markets and the need for wealth to filter down the generations are just some of the reasons the UK public need greater access to advice and guidance on their financial affairs.”