FCA Plans to Help People Get More Financial Advice for Important Decisions

WHY THIS MATTERS: This consultation represents a crucial regulatory pivot designed to finally close the notorious ‘advice gap’ that has disenfranchised millions of UK consumers. By streamlining the suitability framework and clarifying the definition of ‘sufficient’ information, the Financial Conduct Authority is explicitly lowering the barrier to entry for digital and hybrid advice models. This shift toward proportionate regulation directly empowers the next generation of robo-advisors and wealthtech firms to serve customers with simple financial needs, offering solutions that are affordable and scalable. The ability to move from fixed annual reviews to flexible, needs-based support is particularly significant, aligning the regulatory structure with modern software-as-a-service (SaaS) operational models. Firms must recognize this as an unequivocal signal to invest in accessible digital offerings, making true financial inclusion a commercial reality.

The FCA is consulting on how to make it easier for firms to give more simplified forms of individualised financial advice to consumers.

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 their 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.

FF NEWS TAKE: This move fundamentally resets the competitive dynamics in UK wealth management, positioning regulatory clarity as a major accelerant for innovation. The consolidation of suitability rules is a significant structural change. We believe this will move the needle, especially if fintechs use the new flexibility to aggressively undercut legacy pricing. The critical next step to watch is the discussion around trail commission—its elimination would fully cleanse the market, forcing a complete focus on transparent, fee-based service design tailored for the newly accessible mid-market consumer.