Millions more people in the UK could receive help managing their pensions and investments under new proposals from the FCA, which aim to reshape how financial advice is delivered across the country.
Under the proposals, firms would be able to offer ‘targeted support’ to groups of consumers sharing common characteristics. This could include those at risk of unsustainable pension drawdowns, people not saving enough for retirement, or individuals holding excess cash in current accounts rather than investing for the long term.
The FCA said the changes include safeguards to protect consumers while also encouraging investment and innovation.
FCA deputy chief executive Sarah Pritchard said, “We want to help consumers navigate their financial lives and plan for the long term. Some of the most difficult financial decisions we face are how to save, invest and prepare for a comfortable retirement.
“These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike.”
Chancellor of the Exchequer Rachel Reeves highlighted the broader benefits for households, saying, “Too many people are missing out on the support they need to build a more secure financial future for themselves and their families. Today’s reforms will make a real difference to help working people make better long-term financial decisions, ultimately putting more money in their pockets as part of our Plan for Change.”
These reforms are intended to provide a framework for the next 20 to 30 years, supporting both current and future generations in navigating their financial futures. The FCA aims to establish a market offering full financial advice, simplified advice, targeted support and guidance, ensuring consumers can access help when they need it at a price they can afford.
Access to affordable advice remains limited, with the FCA’s latest Financial Lives survey revealing that only 9% of adults received financial advice on pensions or investments in the past year. Among those who did not seek advice but held £10,000 or more in cash savings, 24% said they avoided investing due to lack of knowledge, 12% felt overwhelmed by the options, and 8% indicated they needed more support before investing.
An estimated 7m adults in the UK have £10,000 or more in cash savings but may miss out on investment opportunities that could support their financial wellbeing over their lifetimes.
To accelerate progress, the FCA adopted a ‘policy sprint’ approach for the first time, running a six-week initiative with input from consumer groups and regulatory bodies, alongside consumer testing published with the consultation.
The consultation on these reforms is now open for eight weeks, aiming to finalise the steps needed to expand advice accessibility. The FCA is also collaborating with the government to address regulatory barriers that limit firms from engaging with consumers, ensuring solutions can be implemented efficiently.
These changes form part of nearly 50 initiatives the FCA committed to in a letter to the Prime Minister in January 2025.
Commenting on the change, Areg Nzsdejan, co-founder and CEO of Cardamon, said in a LinkedIn post, “For the first time in a decade, the FCA is reversing rules that had priced millions out of financial advice. By scrapping onerous suitability hurdles and introducing “targeted support”, the regulator is correcting a policy that widened the advice gap.
“This change gives investment firms – and any business looking to enter the market – the chance to reach the 13.5 million to 30.6 million people the FCA says could benefit. It is a huge opportunity for organisations that can act quickly. The key is to understand the new rules early and execute efficiently. Cardamon (YC W25) is here to power this.”
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