Opinion | The FCA is simplifying advice. But, asks Patrick Murphy, are we focusing on the right things?

The FCA has just published one of the most important consultation papers in years, on simplifying pensions and investment advice.  

Earlier this week, IFA Magazine published the first of a series of three articles written by Patrick Murphy, Sustained Momentum, someone with more than 50 years’ of practical experience in the Financial Planning profession, highlighting why the FCA is running this process. Today we bring you his second article.

In his first article on this theme, which was published earlier this week, Patrick set out how the advice gap was created — and why the FCA is now trying to address it through its consultation 26/10 on simplifying pensions and investment advice.

He also explained why this matters. Not just because of what the FCA is proposing, but because of how the industry chooses to respond.

Most advisers will read this consultation through a technical lens, considering such points as:

What rules are changing?
What can we now do differently?
Where is the flexibility?

All these are valid questions of course. But I think there’s a more important one, and that’s to ask are we focusing on the right problem? That’s why, in this, part 2 of my 3 part mini-series on the FCA’s CP26/10, entitled ‘Simplifying the pensions and investment advice rules’ which I set out below, I’ve focused on just that.

After all, the direction of travel is clear. The FCA is trying to reduce friction. Across the consultation, there is a consistent theme which is to :

• make advice more proportionate
• remove unnecessary barriers
• enable firms to serve more clients

For example:

• moving from “necessary” to “sufficient” information
• reducing the need for detailed knowledge and experience assessments
• simplifying expectations around risk profiling
• removing the requirement for annual suitability reviews
• embedding proportionality into the rules

All of this is designed to make advice easier to deliver. And that is clearly needed. But underpinning all of this is an assumption, that  if we make advice easier and cheaper to deliver, then more people will receive it and outcomes will improve.

That assumption is worth challenging. Let’s take a few examples to illustrate my point here:

“Sufficient” vs “necessary” information. Will this actually change behaviour inside firms? Or will firms continue to gather more information than needed, because of fear of hindsight challenge? If so, the change risks being semantic rather than practical.

Simplifying risk assessment. A client’s stated risk tolerance is often a poor predictor of behaviour. Clients struggle not with questionnaires, but with reactions particularly to issues such as:

• when markets fall
• when uncertainty rises
• when emotions take over

So simplification may improve process, but not necessarily outcomes.

Removing annual reviews. More flexibility makes sense. But if structured touchpoints like these are to reduce, then what replaces them? After all, outcomes are driven by:

• ongoing engagement
• timely intervention
• behavioural support

Without that, less structure may simply mean less engagement. Across the consultation, there is strong focus on how advice is delivered. But much less on what happens afterwards.
And that matters. Because even if we simplify advice, reduce cost and increase access, we still haven’t addressed the core issue which is whether clients actually act — and keep acting — on advice.

So rather than just asking: Do we agree with these proposals? Firms should also ask:

• Will this improve client behaviour?
• Will it increase follow-through?
• Will it improve long-term outcomes?

And if not, what else is needed?

If you’re responding to this consultation — and in my opinion you should — this is the opportunity.
It’s not just to comment on the rules, but to shape the future of advice. Because the FCA is clearly open to change. The question is, what do we want the next version of advice to look like?

In my 3^rd and final article on this topic, which will be published next week here on IFA Magazine, I’ll set out what a model built around behaviour, engagement and execution could look like in practice.

Respond to the FCA by 22/05/2026

The closing date for the FCA’s consultation CP26/10, entitled ‘Simplifying the pension and investment advice rules’ , is 22^nd May 2026. You can submit your response to the FCA using this link: https://www.fca.org.uk/publications/consultation-papers/cp26-10-simplifying-pensions-investment-advice-rules

PART III of Patrick’s series of articles looking at this topic will appear on www. IFAMagazine.com on Monday 20th April.

About Patrick Murphy

Patrick Murphy is one of the UK’s most experienced and respected financial planners, with over 50 years in the profession. He built and sold his award-winning firm, Zen Wealth LLP, after a long career that included winning numerous industry awards.

Patrick now leads Sustain Momentum Ltd, where he is exploring the use of AI, mindset, and modern strategy. His work blends deep technical knowledge with the human side of advice, helping advisers simplify their processes, elevate client experience, and enhance firm value.

His mission is simple: help advisers build better businesses, serve more people, and lead happier, more purposeful lives.