The FCA’s consultation on “targeted support” could offer valuable opportunities for the UK’s Mutuals and Friendly Society sector if implemented with proportionality and flexibility, according to leading independent financial services consultancy Broadstone.
Mutuals, which often combine savings, investment and with-profits products, could use targeted support to guide members toward long-term value. For example, a well-managed with-profits fund can smooth investment returns and offer a compelling alternative to cash for members wary of short-term market volatility. This could help to deliver potentially stronger long-term outcomes for cautious savers.
However, by their very nature, Mutuals and Friendly Societies have a smaller range of products and funds so, with the FCA expected to publish its policy statement by the end of this year, it is vital that in finalising the framework, the regulator recognises the unique operating models of smaller Mutuals and Friendly Societies.
Clearer alignment between the FCA and ICO on what constitutes advice, guidance and marketing would empower Mutuals to communicate confidently about savings options and encourage stronger member participation.
Rob Kerry, Actuarial Director at Broadstone, commented: “Mutuals and Friendly Societies are uniquely placed to benefit from this evolution. Their member-focused model already promotes appropriate saving and investment behaviours, and targeted support could help them do even more to encourage the savings habit and improve long-term outcomes.”
“However, it’s vital that the final rules are proportionate and take account of the smaller scale and simpler product sets of Mutuals. The regulator must ensure that well-intentioned rules do not inadvertently restrict the clear, practical guidance these organisations already provide to their members.”
