There are significant "flaws" in the use of risk profiling tools which could lead to accusations of mis-selling, according to a financial software provider.
Speaking at a roundtable event, Bruce Moss, strategy director of eValue FE, said many advisers are shoe-horning clients into unsuitable funds based on the answers given in psychometric risk questionnaires.
This practice could lead to consumer dissatisfaction as decisions made can be based on short-term volatility and do not take into account a client's objectives or other assets.
Moss also felt increasing use of these tools could undermine adviser business as they look to add value in the post RDR world.
"How much will someone pay for [such a service]? What could be done that the client could not do online themselves? It's a dumb solution and [it will not] sustain an advice proposition," he said.
However, Susan Hill, chartered financial planner and founder of Susan Hill Financial Planning disagreed: "It is not a single fund solution, it is a model portfolio solution. The FSA is concerned advisers are using these model portfolios for all clients. If you're a good adviser, you will understand what's underneath these funds."
She said it was not an example of mis-selling but of bad advice, as advisers should not use these tools as their only client solution.
Developed by industry-wide group
Joined in 2002
'Educate clients' children'
Raised £15m earlier this week
From 8pm Friday 19 October