The Financial Conduct Authority (FCA) is progressing with its Advice Guidance Boundary Review, aimed at closing the “advice gap” and improving support for consumers making key financial decisions, particularly around pensions.
The three main proposals that will be examined in the FCA’s next consultations in 2024–2025 are targeted support, simplified advice, and clearer distinctions between regulated advice and unregulated guidance.
The recommendations are generally supported by stakeholders, who place a high priority on the need for stronger protections, clarity, and increased consumer confidence. It is generally agreed upon that simplified guidance would not be adequate for all consumers, especially those with lower incomes. Targeted support is thought to be essential to close the gap and guarantee that these consumers get the appropriate support when they need it.
Pensions will be the FCA’s primary priority, and a consultation on pension support is planned for December 2024. It seeks to implement regulations that cover pensions and more general investment support by mid-2025, making financial guidance more accessible and affordable for consumers.
Furthermore, to enable consumers to make informed investment decisions, the FCA is attempting to replace the EU-inherited consumer disclosure regulations with a new framework tailored to the UK. Following consultations in 2024, a new Consumer Composite Investments (CCI) system with more flexible and transparent criteria is scheduled to be adopted by mid-2025.
FCA executive director consumers, competition and international Sarah Pritchard says: “We are committed to fostering a healthy investment culture, one where people feel empowered not only to save, but to invest with confidence. This will benefit consumers directly while providing the capital necessary to stimulate economic growth.
“We welcome the Chancellor’s focus on advice and pensions as part of her mansion House speech, and today we are publishing an update on our joint Treasury Advice Boundary Review. This update outlines the next phase of work and highlights our own focus on pensions.
“We are also collaborating closely with the Information Commissioner’s Office and are providing clarity on what constitutes direct marketing, ensuring that firms have the guidance they need to communicate effectively with consumers.”
