Proposals to make financial advice more accessible set out by City regulator
Some 4.2 million people in the UK hold more than £10,000 in cash and are open to investing some of it.
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Your support makes all the difference.More people with excess savings held in cash could be encouraged to move their money into stocks and shares Isas, as a result of proposals to make financial advice easier to access.
The proposals will create a new simplified financial advice regime, making it cheaper and easier for firms to advise consumers about certain mainstream investments within stocks and shares Isas, the Financial Conduct Authority (FCA) said.
The watchdog’s recent Financial Lives survey found 4.2 million people in the UK hold 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, the regulator said.
These proposals are part of our work to deliver a consumer investment market where people can readily access support and firms aren’t deterred from providing it
The FCA expects that its proposed changes could lead to more people moving some of their excess cash savings into investments held within stocks and shares Isas.
The FCA’s consumer research found that less wealthy customers do not tend to access professional support with their finances as often as wealthy consumers – although many would like more support to make financial decisions, such as investing in a stocks and shares Isa.
The proposed changes aim to prevent in-person financial advice from being too costly for many potential investors.
The regulator is consulting on various measures, including allowing advice fees to be paid in instalments, so that customers are not burdened by big up-front bills.
It is also looking at limiting the range of investments within the new regime, so that advice is easier to deliver and understand, and at making the qualification requirements for the new regime more proportionate, so that delivering the simplified advice is less costly for firms.
Sarah Pritchard, executive director of markets at the FCA, said: “Now more than ever, people across the UK should have access to useful and affordable financial products and services which can improve their quality of life and support the economy.
“These proposals are part of our work to deliver a consumer investment market where people can readily access support and firms aren’t deterred from providing it.”
The FCA is asking for comments on its consultation paper by February 28 2023.