FCA says new 'targeted support' rules see firms invest up to 53% more
The City regulator has revealed early results from its shake-up of investment advice rules, with more than a dozen firms now authorised to offer free targeted support.
What the FCA said
The Financial Conduct Authority has given an early progress update on its overhaul of investment advice rules, saying more than a dozen firms have already been authorised to offer “targeted support” to consumers since the scheme launched six months ago.
Speaking at the Investment Association’s annual dinner, FCA deputy chief executive Sarah Pritchard said consumers who receive targeted support are investing “up to 53% more” than those who do not, citing early data from the rollout.
What targeted support means for consumers
Targeted support is a new category of help the FCA has introduced for people with investments or savings, sitting between full regulated financial advice and generic guidance. It is designed to let firms point groups of consumers with similar circumstances towards suggested courses of action, without those consumers having to pay for full advice.
The regulator said the change forms part of a wider move away from prescriptive disclosure rules and towards a focus on outcomes for consumers, under its Consumer Duty framework. It has also reformed its broader advice and guidance rules as part of the same programme.
What happens next
The FCA said it will “soon” publish updated rules on simplified advice, alongside case studies developed jointly with the Financial Ombudsman Service. The stated aim is to give firms more confidence to offer additional forms of lower-cost, simplified advice to consumers, building on the targeted support framework already in place.
No date was given for publication of the updated rules, and the FCA did not set out the exact cost of simplified advice services once they are introduced, nor confirm which firms beyond the “more than a dozen” already authorised will offer targeted support.
Why it matters for household money
The changes affect anyone with savings or investments who might otherwise rely on free guidance or pay for full financial advice. Targeted support is intended to close a gap for consumers who want more direction than basic guidance provides but cannot or do not want to pay advice fees, which can run into hundreds of pounds.
The FCA’s figures suggest consumers taking up targeted support are putting significantly more money into investments than those who do not, though the regulator did not break down what “up to 53% more” means in pounds and pence, nor over what time period the comparison was measured, nor how many consumers in total have used the service so far.
The bigger picture
Pritchard described the changes as part of a deliberate, strategic reshaping of investment regulation rather than “piecemeal rule writing”, saying the sector was now “just past peak rule making” after a period of significant regulatory change. She said the FCA’s objective is growth that benefits consumers, supports competitiveness in the investment industry and encourages innovation among firms.
Further detail on the updated simplified advice rules, including timing and scope, is expected when the FCA publishes its formal rule changes and accompanying Ombudsman case studies, which it says will follow “soon”.