The Financial Conduct Authority has launched a consultation on proposals to make it easier for firms to provide simplified forms of individualised financial advice to consumers. While the initiative is primarily aimed at the advice and wealth management sector, brokers moving into investment advice, portfolio tools, or hybrid models could also be affected.

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In April last year, the FCA proposed changes to investment cost disclosures affecting around 12.6million UK adults. The aim was to simplify information and reduce compliance burdens while retaining key cost details.

FCA Aims to Expand Advice Access

The FCA said simplified advice could help people with straightforward financial needs. It does not require a full review of all aspects of a person’s finances, making advice more accessible and lower in cost.

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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,” adding that the regulator wants “a market that provides good quality, lower cost simplified advice” alongside broader support.

She said the FCA aims to “see more people getting supported,” while assessing if the proposals will “build firms’ confidence to offer a wider range of advice.”

Simplified Advice Framework Faces Limited Adoption

The FCA noted that firms are already allowed to offer simplified advice, but adoption has been limited. To address this, it is proposing a set of targeted changes while maintaining consumer protections.

These include simplifying and consolidating the suitability framework into a single set of rules and expectations and clarifying existing flexibilities, with an expectation that advisers consider “sufficient” information when giving advice.

Trail Commission Discussion Opens, Rules Unchanged

The proposals also aim to make suitability communications more concise and focused on consumer needs. In addition, the FCA is proposing changes to ongoing advice, moving from fixed annual reviews to flexible, needs-based assessments.

Alongside the consultation, it has opened a discussion on trail commission to modernise rules and reduce potential consumer harm. Adviser qualifications and charging rules will remain unchanged.

The regulator noted earlier steps to expand targeted support from April and said many consumers will still need personalised advice, describing the consultation as the final stage of its policy work to improve the advice market.