The FCA said the aim is to allow firms to provide mass‑market consumers with straightforward financial needs greater access to simplified advice on investing into mainstream products.
“We want to make it easier for firms to provide advice that is proportionate to the needs of the consumer at a lower cost,” it said.
“This will help consumers who are holding large sums in cash to invest, potentially for the first time, into S&S Isas. This is something we committed to in our consumer investments strategy."
The FCA added: “We propose a new streamlined regulatory regime to increase firms’ confidence and commercial willingness to provide financial advice proportionate to the needs of the consumer.
“It will support consumers with straightforward needs holding excess cash to invest it within a S&S Isa wrapper.
“Firms should find it cheaper and easier to provide this advice to consumers who need it. Consumers should find that unnecessary friction in the advice process is reduced.”
Support from the industry
Chris Hill, chief executive of Hargreaves Lansdown, said it supports the FCA’s move to make investing simpler.
“It’s great that the FCA recognises that today’s all or nothing approach to advice doesn’t suit everyone, especially those with sufficient savings who are starting out on their investment journey.
“The proposal should help narrow down options for those who want to invest, but aren’t sure where to start.”
However, Hill said the proposal only solves a small part of the much bigger advice gap problem.
“We welcome the fact that the FCA committed in September to a much wider holistic review of advice and guidance,” he said.
Likewise, Prakash Chandramohan, strategy director at The Investing and Saving Alliance, said it welcomed the FCA’s efforts to open up more mass market support for consumers.
“Helping people with more affordable advice and personalised guidance will allow them to make informed decisions that best serve their interests and to make the most of their savings,” he said.
Yet he too added that the FCA has been constrained through the legislative framework, “which means the proposals will not solve the consumer disengagement problem that lies at the heart of this issue”.
“Simplified advice needs legislative change and to sit alongside Harriett Baldwin MP’s tabled amendment to the financial services and markets bill or similar, legislative solutions,” he added.
“In these economically turbulent times, consumers need focused and effective help from financial services providers, and only a concerted, combined regulatory and legislative effort can deliver on it.”
