The FCA’s latest consultation on simplified advice is being positioned as a practical step towards closing the long-standing advice gap. But for firms, the bigger story sits elsewhere. This is not just about access. It is about how advice businesses are structured, delivered and ultimately monetised in the years ahead.
At its core, the regulator is exploring how firms can deliver more streamlined, individualised advice without the need for full fact-finds and comprehensive reviews in every case. The aim is clearly to make advice more accessible and affordable for consumers with straightforward needs, while maintaining standards and protections. In reality, it means that if many of the proposals do in fact come to fruition, the changes firms have put in place to align with previous rules and regulations may need to be revisited, potentially at considerable cost.
So, what does this proposal mean for advisers and their clients? We bring you insights and opinions from a range of experts across the profession.
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.”
For advisers, the shift is towards a continuum of services, where full financial planning sits alongside targeted support and simplified advice rather than acting as the only viable model.
Moving towards flexibility and scalability
For many firms, the current regulatory framework has effectively pushed all clients through the same process, regardless of complexity. That has made it difficult to serve those with simpler needs in a commercially viable way.
Jamie Jenkins, Director of Policy at Royal London, puts it into context: “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. 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.”
This shift opens the door to more segmented, tiered service models, where firms can better align service levels with client needs and profitability.
Dan Hall, EY UK & Ireland Wealth & Asset Management Leader, comments: “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.”
Alongside this, technology will play a critical role in making these models work in practice.
Ben Goss, CEO, Dynamic Planner, says: “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.”
Together, this points towards more scalable, hybrid advice models, where digital tools support advisers in delivering different levels of service efficiently.
Reshaping ongoing propositions
One of the more immediate implications for firms lies in the proposed shift away from fixed annual reviews towards more flexible, client-led servicing models.
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.”
Instead of bundling everything into one annual service, firms could design more targeted, event-driven or needs-based offerings, potentially improving both client engagement and commercial viability.
Commercial viability remains the key test
While the direction of travel is broadly welcomed, the success of simplified advice will ultimately depend on whether firms can make it work commercially.
Jane Wilson, Targeted Support Lead at 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.”
That balance between accessibility and profitability will be critical. Without it, simplified advice risks becoming another well-intentioned concept that fails to scale.
Protecting the value of holistic advice
Importantly, the FCA is not proposing changes to qualification standards or adviser charging rules. That has been widely interpreted as a signal that simplified advice is not intended to dilute the value of full financial planning.
Steve Gazard, Chief Distribution Officer at Quilter, explains: “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.”
“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.”
For firms, this reinforces the idea that holistic advice remains the premium service, sitting at the top of a broader, more flexible model.
A broader market opportunity
There is also a sense that these proposals could expand who delivers advice, not just how it is delivered.
Rob Hillock, Head of Personal Financial Planning at Broadstone, commented: “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.”
That introduces both opportunity and competition. Advice firms may need to think more carefully about how they differentiate their value proposition in a more crowded and segmented market.
A model for the future
Ultimately, the consultation reflects a broader shift in how the advice market is expected to evolve.
As Holly Mackay, CEO of Boring Money, puts it: “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.”
For firms, the challenge now is practical: how to design a business model that can deliver across that continuum while remaining commercially viable, compliant and client focused.
By Jenny Hunter, IFA Magazine’s Deputy Editor.
