Opinion | The advice gap wasn’t discovered. It was created. Now the FCA wants to fix it, says Patrick Murphy

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

Most advisers will skim it. Some will read the headlines. Very few will respond. That’s the viewpoint of Patrick Murphy, Sustained Momentum, someone with more than 50 years’ of practical experience in the Financial Planning profession.

And Patrick explains in this, the first of three insightful articles he’s written for IFA Magazine on this important development, why that would be a mistake. Because this isn’t just another consultation, it’s an attempt to fix a problem the industry has been living with for over a decade. Patrick explains this so clearly in part 1 of his mini-series below. He speaks from the heart about why it matters and why, if you’re working in the advice profession, you really should take the time to feedback your thoughts to the FCA on this key development:

How the advice gap was created.

The “advice gap” didn’t appear overnight. It was created — gradually — through a series of well-intentioned regulatory reforms. From CAT standards, through to RDR and beyond, the direction of travel was clear:
• higher professional standards 
• greater transparency 
• removal of commission bias 
• stronger governance 

And in many ways, these reforms worked. Advice became more robust, more consistent, more professional. But there was a consequence. As advice improved, it also became:
• more complex to deliver 
• more time-consuming 
• more expensive 

That meant fewer advisers, higher minimum fees, and greater regulatory burden. And slowly, a large part of the population was left behind. Not because they didn’t need advice. But because the model no longer worked for them.

The FCA’s response
This is what the current consultation is trying to address. At its core, the FCA is attempting to make advice:
• simpler 
• more proportionate 
• more accessible 

Key proposals include:

• replacing “necessary” information with “sufficient” information 
• reducing the need for detailed knowledge and experience assessments in some cases 
• simplifying risk profiling expectations 
• embedding proportionality into the rules 
• removing the requirement for annual suitability reviews 
• clarifying how firms should deal with disengaged clients 
• exploring changes to legacy trail commission 

Alongside targeted support, this is about creating a continuum of help — from guidance through to full advice. Directionally, this is a big step forward.

Why this matters more than most consultations

This isn’t just technical. It will shape:
• how advice is delivered 
• who it is delivered to 
• and what firms are commercially able to offer 

For many firms, this could open up entirely new service models. Or reinforce existing ones.
But only if it is understood — and influenced — properly.

A challenge to IFAs

If you run, lead or work within an advice firm, this matters. Not in theory, but in practice.
Because the rules that come out of this process will define:
• what you can do 
• how you can charge 
• and who you can serve 

So the question is simple:

1. Have you actually read the FCA’s proposal? If not, just follow the link at the bottom of this article and check it out for yourself.  And then, importantly, are you going to actually provide your response?

What comes next

Because the advice gap wasn’t just about access. It was also about what happens after advice is given.  In my next article on this subject, I’ll explore why simplifying advice may not be enough — and why addressing consumer behaviour could be the real battleground.

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 II of Patrick’s article will appear on www. IFAMagazine.com later this week

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.