More people could access financial
advice, under proposals set out by the Financial Conduct
Authority (FCA).
The FCA is consulting on how to make
it easier for firms to give more simplified forms of
individualised financial advice to
consumers.
Simplified forms of
advice can help consumers with more straightforward
needs and do not require a full assessment of all
their financial circumstances, making it more
accessible and affordable.
Sarah Pritchard, deputy chief
executive of the FCA, said:
“For too long the support people need
to make important financial decisions has been out of reach for
many.
“A market that provides good quality,
lower cost simplified advice alongside comprehensive financial
advice and targeted support will better support people making
decisions about their financial lives.
We want to see more people
getting supported,
who aren't currently, and a market that innovates and offers tailored
services to meet differing consumer
needs.
“We
welcome everyone's views on whether our proposals
will achieve our aim of building firms' confidence to
offer a wider range of advice and ultimately to
help consumers navigate their financial
lives.”
Firms are already able to provide more
simplified forms of advice but not many offer
it. To encourage innovation and open access, the FCA
is proposing to
make small changes while maintaining appropriate
consumer protections, which it believes can
revitalise the sector, including:
-
Simplifying
and consolidating the suitability framework into one
set of common rules and expectations.
-
Clarifying existing flexibilities in
suitability rules with an expectation that advisers consider
‘sufficient' information.
-
Rebalancing the role and purpose of
suitability communications to
support firms making them concise,
consumer-focused and proportionate.
-
Changes to give firms greater
flexibility in how they design and deliver ongoing advice
services. This includes moving from a fixed annual suitability
review to periodic reviews based on clients'
needs.
The FCA is starting a discussion
about the future of trail commission to modernise the rules and
to prevent potential consumer harm.
Qualification standards for advisers
will remain unchanged. The FCA is also
not proposing to change the adviser charging rules. Advice
will still need to be paid via agreed-upon adviser charges rather
than provider-paid commission or through
cross-subsidisation.
The FCA has already acted to help
consumers get more support. From
April some financial firms will be allowed
to offer targeted support and suggest products to
consumers based on what they would recommend to those in similar
circumstances.
While targeted support will enable
support to be given to groups of consumers, many consumers will
need or value individual advice tailored to their specific
circumstances.
Other than updating our perimeter guidance,
this is the final piece in the FCA's policy work to
make sure that the advice market works for the millions who
depend on it for their financial
futures.
Notes to
Editors
- Read the full consultation.
-
The consultation closes on 22
March 2026.
-
There are many situations in which
simplified forms of advice may help. An
example could be if a client wants to invest a
one-off lump sum into a single investment. But where the
financial situation is more complicated, such as deciding how
to draw income in retirement from multiple
sources, comprehensive forms of advice
will likely be more appropriate as a
firm will need to take account of more
information.
