More people could access financial advice, under proposals set out today by FCA.
The FCA is consulting on how to make it easier for firms to give more simplified forms of individualised financial advice to consumers.
According to the FCA, simplified forms of advice can help consumers with more straightforward needs and do not require a full assessment of all their financial circumstances, making it more accessible and affordable.
Sarah Pritchard, deputy chief executive of the FCA, said:
‘For too long the support people need to make important financial decisions has been out of reach for many.
‘A market that provides good quality, lower cost simplified advice alongside comprehensive financial advice and targeted support will better support people making decisions about their financial lives. We want to see more people getting supported, who aren’t currently, and a market that innovates and offers tailored services to meet differing consumer needs.
‘We welcome everyone’s views on whether our proposals will achieve our aim of building firms’ confidence to offer a wider range of advice and ultimately to help consumers navigate their financial lives.’
Firms are already able to provide more simplified forms of advice but not many offer it. To encourage innovation and open access, the FCA is proposing to make small changes while maintaining appropriate consumer protections, which it believes can revitalise the sector, including:
- Simplifying and consolidating the suitability framework into one set of common rules and expectations.
- Clarifying existing flexibilities in suitability rules with an expectation that advisers consider ‘sufficient’ information.
- Rebalancing the role and purpose of suitability communications to support firms making them concise, consumer-focused and proportionate.
- Changes to give firms greater flexibility in how they design and deliver ongoing advice services. This includes moving from a fixed annual suitability review to periodic reviews based on clients’ needs.
The FCA is starting a discussion about the future of trail commission to modernise the rules and to prevent potential consumer harm.
Qualification standards for advisers will remain unchanged. The FCA is also not proposing to change the adviser charging rules. Advice will still need to be paid via agreed-upon adviser charges rather than provider-paid commission or through cross-subsidisation.
The FCA has already acted to help consumers get more support. From April some financial firms will be allowed to offer targeted support and suggest products to consumers based on what they would recommend to those in similar circumstances.
While targeted support will enable support to be given to groups of consumers, many consumers will need or value individual advice tailored to their specific circumstances.
Other than updating our perimeter guidance, this is the final piece in the FCA’s policy work to make sure that the advice market works for the millions who depend on it for their financial futures.
Jonathan Lipkin, Director, Policy, Strategy & Innovation at the Investment Association, said: “Today’s consultation marks another welcome step in redynamising the UK’s retail investment market. Enabling better long‑term decisions, whether through simplified advice, full advice or targeted support, is vital for consumers. Alongside other reforms such as the new CCI regime and wider initiatives including the risk warnings review and the forthcoming retail investment campaign, this represents an important opportunity to drive meaningful progress. We look forward to working with the FCA and wider stakeholders on the new proposals.”
Jamie Jenkins, director of policy, at Royal London, commented: “The FCA’s latest consultation on the advice rules fits more squarely in the bracket of ‘completing the picture’ rather than ‘redefining the landscape.’
“Put simply, the advice sector works well for those it serves. Research consistently shows that those people who pay for professional advice, in the main, find it to be very valuable. In Royal London’s Meaning of Value 2025 study, 68% of clients rated their advice as good or excellent value for money.
“But the number of people who do pay for professional advice remains stubbornly low, fewer than 1 in 10.
“With such a void between advice and generic guidance, the introduction of ‘Targeted Support’ provides an opportunity to bridge this gap. ‘Simplified advice’ isn’t new, but the detail proposed helps clarify its position in completing the picture, at least from the standpoint of the continuum of services available to consumers.
Advisers will undoubtedly have mixed views on whether there is a place, or indeed demand, for these additional definitions, but any simplification of the rules is likely to be broadly welcomed. And the fact there is no proposed dilution of the qualifications threshold should help to maintain the very high standards associated with professional advice.
“Changing the requirements for suitability reviews has received something of a mixed reaction, but it clearly fits with the overall theme of focusing more on the context of a situation rather than boiler plate inputs, under an outcomes-based regulatory approach.
“Some advisers have already said they expect to continue with annual reviews, but at least there is greater latitude to focus on what they believe is of most value to their clients, as opposed to the need to conform to more prescriptive, mandatory processes. This may lend itself to greater innovation and diversity of services to suit the specific needs of a segmented client base.
“The Regulator is right to reconsider legacy trail commissions, which date back well over a decade now to the pre-RDR era. However, it is also thoughtful to consider any immediate adverse impact on both clients and advice firms. Unintended consequences are by nature rarely foreseeable.
It’s clear that there is demand from consumers for more help now and, while some may feel that AI large language models can partially plug that gap, I doubt many people have the confidence to fully rely on the answers, let alone that they are asking precisely the right questions.
“To some extent, the landscape for guidance and advice is being prepared for the increase in demand we are likely to witness many years from now. While few people seek out professional advice now, no-one really knows what this will look like when workplace pensions saving starts to mature. Millions more people will reach retirement with a significant pot of money, wondering how on earth they make it last.
Having a continuum of services for people to access may prove to be precisely the journey we need to allow the professional advice sector to grow when that day arrives.”
Dan Hall, EY UK & Ireland Wealth & Asset Management Leader, comments: “Today’s FCA consultation on simplified advice is a welcome step forward in addressing the UK’s long‑standing advice gap.
“Recent EY research shows that most savers are open to receiving financial guidance, but a lack of confidence and concerns around cost hold many back. For practical investment decisions – such as how much to contribute to a pension, whether to invest surplus cash, or whether an ISA is the right option – full, holistic advice can feel unnecessarily complex or out of reach. But without access to more affordable, proportionate support, many savers are left delaying investment decisions altogether.
“Simplified advice is intended to help bridge this gap. Today’s paper sets out initial foundations for how firms can help deliver personal, regulated advice for everyday needs more quickly, and at a lower cost. Used alongside targeted support, it has the potential to form part of a more graduated advice model – helping savers move from general information, to targeted suggestions, and ultimately to tailored guidance in the digital formats many consumers increasingly expect.
“In the consultation period, the focus will be on getting the framework right for practical use. The success of simplified advice will depend on firms genuinely redesigning advice journeys – including the responsible use of data and AI to streamline advice delivery while maintaining the highest standards of consumer protections and trust. Done well, this could be an important step forward in widening access to financial advice and improving long‑term savings outcomes across the UK.”
Simon Harrington, Head of Public Affairs at PIMFA, says: “The FCA’s decision to clarify and update its requirements for firms delivering ongoing advice services is extremely welcome.
“Giving firms the flexibility to deliver periodic assessments in line with consumer needs will encourage firms to develop new, innovative propositions for different client needs. These proposals – and the accompanying guidance – should give firms the confidence they need to continue delivering high quality financial advice on an ongoing basis.
“While this represents meaningful progress, it is too early for us to judge how firms will respond to the proposals for Simplified Advice will be greeted as warmly. We continue to take the view that it will only be attractive to firms who can offer it in a way that is commercially viable – this means looking at adviser qualifications. We note the FCA’s clarification of its expectations for Trainees who have not yet fully qualified on this matter.
“We also note the FCA’s decision to look more closely at trail commission. In doing so, we welcome its intention to properly examine the impact on consumers and firms with these legacy arrangements. Whilst we note the FCA’s concern in this area, it is already the case that these arrangements will be subject to regular review by firms to ensure they continue to deliver value for money and good outcomes to consumers. We look forward to working closely with the FCA on this matter over the coming months.”
Chris Paskiewicz, Policy Adviser, Conduct Regulation, at the ABI said: “The FCA’s work to simplify the advice rules is a positive step towards closing the advice gap. Through more proportionate and clear rules, simplified advice should complement targeted support, making it even easier for people to get the help they need with important financial decisions.
“We’re pleased that the FCA is consulting on simplifying and consolidating the rules, however, by not consulting on the adviser charging rules the regulator risks limiting how providers and savers could use the service. We’ll continue to work with our members to respond to the regulator’s proposals.”
Jane Wilson, Targeted Support Lead, KPMG UK, said: “The drive to create simplified advice is a welcome step toward broadening access for consumers who are currently priced out or underserved by the traditional advice market, complementing the recent launch of the FCA’s targeted support regime. Importantly, the proposals make clear that this is not about lowering standards: the retention of QCF Level 4 as the minimum qualification helps preserve trust and professionalism in the advice market.
“Simplified advice has the potential to meet consumers’ more straightforward needs, while acting as an important springboard to more holistic advice where appropriate. The FCA’s focus on simplifying rules where they overlap with Consumer Duty requirements should also help firms design clearer, more efficient advice models without duplicative or unnecessary complexity.
“The priority now is ensuring that simplified advice is affordable for consumers, commercially viable for firms, and supported by strong conduct guardrails that prevent mis-selling or consumer confusion. Clear and aligned expectations from the FCA and FOS will be critical to giving firms the confidence to invest and innovate. If implemented well, these reforms could materially increase access to financial advice and help rebuild trust and confidence across a much broader cross-section of society.”
Steve Gazard, chief distribution officer at Quilter: “The FCA’s latest consultation on simplifying advice rules is an important step toward fixing a long‑standing gap in the system. Holistic advice remains the gold standard for anyone with multiple objectives or more complex arrangements, but many people do not need a full review for every decision and currently have no workable alternative. Too often they face a binary choice between paying for a comprehensive service that is disproportionate to the task or receiving no regulated support at all.
“Rather than creating a new simplified advice regime, the FCA is consolidating and streamlining the existing rulebook so firms can make better use of the flexibility already available. Reframing suitability around sufficient information and proportionality, and bringing the rules together into a single area, should help firms deliver simplified forms of advice where a customer’s needs are clear without running a full holistic process each time. That preserves holistic advice value by ensuring the most in‑depth service is focused where it genuinely adds long‑term benefit, while simpler needs can be met more efficiently.
“It is also helpful that the FCA is clarifying that advisers do not always need to justify the client’s level of knowledge‑and‑experience for mainstream recommendations, such as straightforward ISA or pension journeys, and that suitability reports should be concise, client‑facing documents rather than defensive compliance exercises. Combined with the shift from annual to periodic suitability reviews, anchored in fair value under Consumer Duty, the FCA is giving firms more scope to design advice services that reflect real‑world customer needs rather than legacy rule structures.
“Targeted Support, which is soon to be introduced will help people who are not yet ready for a personal recommendation build confidence and make basic decisions, while simplified advice offers the next step when a specific recommendation is appropriate. Together they create the continuum that has been missing: targeted support and simplified advice feeding naturally into holistic advice as customers’ financial lives become more complex, instead of today’s all‑or‑nothing set‑up.
“The success of this package ultimately depends on firms having confidence to operate within this more outcomes‑based framework. Clarifying “sufficient information” in the Handbook and providing new case studies is a good start, but alignment with the Ombudsman on how proportionate, simplified advice will be judged remains essential. Without that clarity, there remains a risk that firms continue to gold-plate processes to protect against hindsight risk and the benefits of simplification will be limited.
“Importantly, the FCA has chosen not to relax adviser‑charging rules or qualification requirements. That is the right approach. Consumers should expect that any personal recommendation, however focused, is delivered by a properly qualified adviser and paid for transparently. The opportunity here is not to cheapen advice but to use existing standards more intelligently so more people can access the right sort of help at the right time.”
James Heal, director of public policy at St. James’s Place, said: “The FCA’s consultation is a welcome step in clarifying the requirements around ongoing advice services, especially the recognition that consumers need different things from ongoing advice enabling some flexibility in offering.
“We are also pleased that the FCA recognises the need for firms to be able to design commercially viable simplified advice. On this latter point, we believe a lot of work will be needed if the objective is to genuinely widen access to advice, close the advice gap, and encourage more people to invest for the long term. We will now work with the FCA and wider industry to try to achieve this, whilst also protecting the quality of holistic advice for those who receive it.”
Rob Hillock, Head of Personal Financial Planning at leading independent financial services consultancy Broadstone, commented: “The FCA’s plans are an important step towards closing the long-standing advice gap in the UK. Too many people are making complex decisions about pensions, investing and retirement without any support, so creating a clearer framework for targeted support and simplified advice could significantly improve access to help.
“It is interesting that the regulator is opening up the possibility of other institutions to offer simplified forms of advice, including banks, insurers and asset managers. This could move the framework away from holistic, long-term planning and more towards the selling of specific products which brings risks but could also encourage growth in the financial advice profession.
“The key will be ensuring consumers clearly understand the difference between guidance, targeted support and full financial advice, and that firms have the confidence to engage with customers without excessive regulatory risk. If implemented well, these reforms could make financial support more accessible and affordable, particularly for people approaching retirement who face some of the most complex financial decisions of their lives.
“This could fundamentally change how people access financial help in the UK, moving the system away from advice being only for the wealthy towards more scalable support for the mass market.”
Holly Mackay, CEO of Boring Money, says: “If we consider demand, there is a very strong case to be made for Simplified Advice to sit in the continuum of help available to consumers. 3 in 10 savers and investors would prefer Simplified Advice to other advice and guidance options. As Targeted Support joins guidance and full advice in the consumer support menu, I think there is a clear place for Simplified Advice at the table too.”
Mike Hanlon, Head of Distribution at Isio Wealth, comments: “The proposals are clearly aimed at removing barriers to innovation and increasing flexibility for firms, whilst maintaining consumer protection. Measures such as consolidating suitability requirements, introducing a more proportionate approach to information gathering and risk assessment, and moving towards more client-led periodic reviews are all constructive developments.
“Reducing some of the more process-heavy requirements has the potential to lower the cost to serve, which is an important factor in addressing the advice gap. Greater flexibility could allow advisers to spend less time on administrative tasks and more time focusing on client needs, helping make it more viable to support those with more modest sums to invest.
“At the same time, many firms already operate structured annual review processes as part of their core service proposition and are likely to continue doing so. Where that’s the case, following up with suitability reports remains an important way to keep a clear record of advice and demonstrate value to clients.
“Similarly, while there may be more flexibility in how risk is assessed, psychometric risk profiling tools continue to play a key role in many firms’ overall approach to suitability and are likely to remain an important part of the advice process.
“Overall, the proposals offer welcome simplification and flexibility and will hopefully expand the reach of valuable advice.”
Greg B. Davies, Head of Behavioural Finance at Oxford Risk: “The real significance of this consultation is not simply that annual reviews may go. It is that the FCA is moving, cautiously but clearly, towards a more dynamic and proportionate model of suitability.
“Good suitability should respond when clients’ circumstances, behaviour or needs actually change, rather than being tied to a fixed annual cycle. Some investors need very little intervention, while others need timely support when markets move, vulnerability emerges or behaviour starts to drift.
“That is where behavioural finance matters. Better decisions do not come just from giving people technically correct answers. They come from giving the right level of support, at the right time, in a form the client can actually engage with and stick with.”
Ben Goss, CEO, Dynamic Planner: “Dynamic Planner’s purpose is to unlock trusted advice and to work with our customers to close the advice gap. For too long, regulation while offering necessary consumer protections has also been a handbrake on the industry’s ability to get advice to more of those who need it. Firms that want to serve clients with simpler needs – a first pension contribution, a lump sum ISA investment or a simple at-retirement choice – have had no option other than the heavyweight suitability processes designed for full holistic advice.
“The simplifications proposed in this consultation, in combination with digital and AI technologies, potentially mean millions more people who would otherwise have found it too costly or time consuming to access advice will be able to do so – and that firms can deliver this advice profitably and safely. They should also mean advice firms seeking to future-proof their businesses by opening the doors to the next generation can do so and make the economics work.
“With its work on the advice-guidance boundary, including Targeted Support, the FCA has demonstrated real commitment to addressing the challenges posed by the advice gap. The proposals in the simplified advice consultation are a meaningful further step. Dynamic Planner has supported this progress throughout and has engaged on the wider discussion of how to make advice more accessible, proportionate and sustainable.
“By putting proportionality at the heart of the suitability framework, clarifying what “sufficient” information looks like and allowing for more flexible ongoing service models, the FCA appears intent on giving firms the confidence to design new advice propositions that reflect a much broader continuum of client needs. That would be great news for both consumers and advice firms alike.
“At Dynamic Planner, we believe proportionate, evidence-based and outcomes-focused suitability is the foundation of a healthy advice market. We are committed to evolving our AI-powered advice platform in line with the evolving regulatory framework, so that whether firms are providing targeted support, limited-scope advice or full financial planning, they’re equipped to deliver it consistently, efficiently and with confidence that they are able to demonstrate their value.
“We look forward to engaging with the consultation and to working with our customers and the industry to make the most of this opportunity.”
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