Multiply has become the first financial planning app to be approved by the Financial Conduct Authority (FCA).
According to a study by OpenMoney, the gap between those who can access financial advice and those who cannot has widened since 2015, with 16m people in the UK currently priced out of financial advice according to Multiply.
To remedy this, and allow more customers to stay informed about their finances, Multiply has developed an app that offers “fully regulated, automated, holistic financial advice”.
New Open Banking regulations brought in last year mean that UK banks are now required to allow customers to share their transaction information (such as bank statements and spending habits) with other banks or third parties. This has created opportunities for innovations in fintech such as budgeting apps and financial planning services.
Holly Mackay, CEO of Boring Money explains that “tech enabled services” are making it easier for people to receive financial advice.
“Pensions and investments remain a baffling, intimidating unknown for most people, and financial advice is largely the domain of those with more than £100,000 to manage. There is a huge need for tech-enabled services which effectively tell people what to do. The first wave of innovation put ready-made investment portfolios online, simplifying the process and making things better. But the bigger problem is not a product problem, it’s an advice problem. And anything which simplifies this and makes it more affordable and accessible to more people is a great step forward.”
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Multiply works by using AI to analyse customers’ financial life from pensions and investments to savings and insurance, taking goals and financial situation into account. From this, it will recommend products and providers for individuals’ needs, as well as how much money should be put into each product. By delivering impartial advice, the app allows customers to create an actionable financial plan.
To achieve FCA approval, Multiply’s technology had to undergo stringent testing processes over the course of 18 months. The FCA needed to verify that Multiply’s algorithm was capable of understanding an individual’s situation and offering bespoke advice to its users.
Multiply is set to launch its fully regulated service in Summer 2019, which will be available for free on Apple‘s iOS operating system.
Vivek Madlani, Co-founder and CEO of Multiply:
“We’re immensely proud to be the first company to receive FCA approval to automate the full advice process. At the moment the industry is going backward, the advice gap is widening. People are ready for Multiply; a free digital-first approach. We want to put the power of a personal financial advisor in everyone’s pocket to help Brits access the advice they need to do the stuff that really matters to them – buying a home, saving for retirement, starting a family.