The Financial Conduct Authority has today (15 November) said it will look at targeted support for pensions savers during the first phase of its Advice Guidance Boundary Review, with a consultation on the plans set to open next month (December).
Then, during the first half of next year, it will decide on rules for better support for consumers in retail investments and pensions.
The regulator noted that there are “distinct challenges” consumers face when making decisions about retirement finances.
The Advice Guidance Boundary Review, which was first announced in December 2023, aims to make it easier for people to access financial advice.
It included three proposals:
Targeted support – a new form of support allowing authorised firms to provide suggestions that are appropriate to consumers with the same high-level characteristics.
Simplified advice – a new form of advice that makes it easier for firms to provide affordable personal recommendations to consumers with more straightforward needs and smaller sums to invest.
Further clarifying the boundary – providing greater certainty for authorised firms on scenarios where they can provide support that does not constitute regulated advice.
The FCA said it wants consumers have access to the help they want, at a time they need it and at a cost that is affordable so they can make informed decisions.
In its update today, the regulator said it will “keep an open mind to test whether targeted support and simplified advice will achieve the aims of this work”.
If the regulator really wants to help pension savers, perhaps they could prevail on governments to stop fiddling with pensions.
With regard to the Advice/Guidance review, they certainly appear to be making heavy weather of something that is basically simple. As I have posted on several occasions – guidance provides generic information. It doesn’t entail arranging a product; whereas advice suggests a specific product and if required arranges it. Those providing guidance (no doubt for a charge) could suggest an adviser so that a positive outcome could result. It would be best if guidance and advice were not provided by the same firm and that there was no pecuniary interest between those providing the guidance and recommending an adviser. But I bet that will be nothing like what will happen. Can you imagine someone paying for guidance and then paying for advice. The whole thing will end up a fudge and the same firm will be providing both. How satisfactory would that be? The guider in effect frogmarching the client to the adviser.