The Financial Conduct Authority (FCA) wants to establish a simplified advice regime focused on a limited range of mainstream investments to allow firms to offer services at cheaper rates.
The regime would be separate from the current regulated advice sphere and could allow fees to be paid in instalments, so clients are not burdened with large upfront bills, the regulator said. The FCA opened a consultation, CP22/24, on the options today (30 November).
The paper asked for responses to proposals such as streamlining the client fact find process so advice is “more straightforward for both firms and customers”. It also said the range of investments covered by the regime would be limited – for example, covering stocks and shares ISAs – explaining this meant advice would be easier to deliver and understand.
It also outlined that qualifications to deliver simplified advice would be “more proportionate” meaning costs would be lower for firms. The move is part of the watchdog’s consumer investment strategy which aims to give more people access to financial advice and allow them to invest with confidence, it said.
The watchdog’s recent Financial Lives survey found 4.2 million people in the UK held more than £10,000 in cash and are open to investing some of it. While keeping a cash buffer is a sensible way of dealing with unexpected expenses, consumers who hold significant amounts of excess cash may be damaging their financial position, as inflation reduces the value of their savings, said the FCA.