AI-focused fintech and money app Plum has received FCA approval to offer Targeted Support to clients through its investment arm Saveable Limited.
Plums says the approval means it will be able to provide, ‘ready-made savings and investment suggestions’ to appropriate groups of consumers with shared characteristics.
The firm says this will include helping them to consider whether investing could be right for them and, if it is, to take steps towards building wealth over the long term.
Plum claims to be one of the earliest fintechs to secure Targeted Support permission from the FCA.
Several major providers have launched Targeted Support offerings - cut down guidance aimed at consumers with “common characteristics.” In June Quilter launched a Targeted Support offering through its Quilter Invest arm, one of the first to sign up to the new regime launched by the regulator in April.
Plum also claims it will be among the first firms to provide Targeted Support through AI technology. It says AI will help “democratise” access to financial knowledge and improve conversations with customers.
Targeted Support has been approved by the FCA to give consumers a lower cost financial guidance option if they do not need full professional financial advice or cannot afford it.
Plum estimates that there is currently over £600 billion in excess cash sitting in low-yield accounts that could be invested via Targeted Support options.
Initially Plum’s Targeted Support service will focus on helping customers who hold a relatively large amount of cash. It will be available within the next few weeks through a new iteration of Plum’s AI assistant, which has already been used by more than 270,000 customers. The product already enables users to set financial goals.
Victor Trokoudes, CEO and founder of Plum, said: “Being approved for FCA Targeted Support marks a major milestone in Plum’s journey as a financial institution, and bolsters our credibility within the financial industry, especially being approved in the scheme’s infancy.
“From day one, Plum has existed to democratise finance. Now, with Targeted Support approval from the FCA, we’re going to further help the 91% of people in the UK who don’t access personalised financial advice through the latest AI technology. This technology has evolved so we can now offer a conversational platform with trusted, automated support.”
Plum says that more than five million customers across Europe have downloaded the Plum app with more than £15 billion set aside via the app.