As part of its consumer investment
strategy, the Financial Conduct Authority (FCA) has set out
new proposals to improve people’s access to financial advice so
they can invest with confidence.
The proposals will create a separate, simplified financial advice
regime, making it cheaper and easier for firms to advise
consumers about certain mainstream investments within stocks and
shares ISAs.
The watchdog’s recent Financial
Lives survey found 4.2 million people in the UK held more
than £10,000 in cash and are open to investing some of it. While
keeping a cash buffer is a sensible way of dealing with
unexpected expenses, consumers who hold significant amounts of
excess cash may be damaging their financial position, as
inflation reduces the value of their savings.
Strong regulation is essential for maintaining the UK’s high
standards and protects consumers. However, the FCA recognises
that adjusting the regime could help the advice market support
mass-market consumers with simpler needs.
The FCA’s proposed changes aim to prevent in-person financial
advice from being too costly for many potential investors, as
this can stop them from investing when it may be in their
interest to do so.
Sarah Pritchard, Executive Director of Markets at the
FCA, said:
“Now more than ever, people across the UK should have access to
useful and affordable financial products and services which can
improve their quality of life and support the economy.
“These proposals are part of our work to deliver a consumer
investment market where people can readily access support and
firms aren’t deterred from providing it.”
The regulator is consulting on:
- Streamlining the customer ‘fact find’ so advice is more
straightforward for both firms and customers
- Limiting the range of investments within the new regime so
the advice is easier to deliver and understand
- Making the qualification requirements for the new regime more
proportionate so delivering the simplified advice is less costly
for firms
- Allowing advice fees to be paid in instalments so customers
aren’t burdened by large upfront bills
