More people could access advice or support to help make their money “work harder” under proposals set out today by the Financial Conduct Authority (FCA) and the Government.
The potential options aim to help more people benefit from investment opportunities, provide for later life, “save for major expenses or tidy up their finances.”
The FCA and Government are seeking views, “as part of the joint Advice Guidance Boundary Review, on three proposals to help people make more informed investment and pensions decisions,” including the following.
- The FCA aims to further clarify “when firms can give consumers support without giving regulated financial advice.”
- An innovative new approach allowing firms to “provide support tailored to groups of people in similar circumstances.”
- A new form of simplified advice that “makes it easier for firms to provide affordable personal recommendations to clients with more straightforward needs and smaller sums to invest.”
The FCA’s Financial Lives survey found “that only 8% of UK consumers received full financial advice in 2022. Decisions on saving, investing and how to use their pension pots are critically important, and some may struggle to make the right choice for them without help.”
Today’s proposals are an important step in “examining how innovation could expand the market to new forms of advice and support, driving competition to better serve consumers, while maintaining consumer protections.”
Following close engagement with stakeholders to “shape these initial proposals, the FCA and Government will continue to work side by side with industry and consumer groups.”
The aim is to open up the market to “a wider range of advice and support, while supporting the UK investments market to thrive.”
Bim Afolami, Economic Secretary to the Treasury, said:
‘The gap between holistic financial advice that is unaffordable for many, and guidance that is free to access but not personal to the consumer, is simply too vast. This so-called ‘advice gap’ is excluding people with modest investments, who are looking for support that doesn’t break the bank. ‘This just isn’t good enough – we have long needed a middle ground that is affordable and accessible. The policy paper that the Government and the FCA have published today will explore how we can achieve exactly that.”
Sarah Pritchard, Executive Director of Markets and International at the FCA, said:
“We want to open the door for more people to get the right advice or support to manage their money at the time they need it and at a cost they can afford. We’ve already helped firms test drive innovative solutions but we want to go further. This review will help us produce new rules to deliver this important step change for industry and consumers. It’s important we get this right and we welcome feedback on whether the proposals are right for consumers and for businesses.”
For more details, check here.