Britain will ease rules on how financial advice is given to consumers by April to help boost the country’s weak investment culture, the financial regulator said on Thursday.
The new regime, dubbed “targeted support”, will allow advisers to guide consumers on whether and how to invest or save for pensions, without carrying out detailed, individual assessments.
The changes form part of a broader package of reforms by the Financial Conduct Authority aimed at boosting retail investment in shares and bonds.
On Tuesday, the regulator published separate proposals seeking views on how to encourage better-informed risk-taking by retail investors, among other investment-related proposals.
Targeted support could make “a real difference,” said Yvonne Braun, Director of Policy at the Association of British Insurers.
“At a time when only 9% of people take regulated advice, targeted support will give people help they can rely on when making complex financial decisions.”
The regulator has tweaked earlier proposals following feedback, reducing the burden on firms for ongoing monitoring to reflect the one-off nature of targeted support. It has also dropped a requirement for firms to ensure consumers understand how they charge for the service.
Under the plans, firms will have to identify “consumer segments” with shared needs or objectives and deliver suitable suggestions. Regulated firms wishing to offer the new form of advice must apply for permission, with the gateway opening in March.
Britons invest far less in shares and bonds than their counterparts in the European Union and the United States. In the three years to 2023, UK households allocated just 19% of financial assets to retail investments, compared with 38% in the EU and 56% in the United States.
“We want to help change that,” FCA deputy chief executive Sarah Pritchard said.
Separately, the FCA launched a consultation on new rules for digital pension planning tools after firms said existing requirements limit the development of effective and engaging projections for consumers.
(Reporting by Phoebe Seers）
