DP23/5: Advice Guidance Boundary Review – proposals for closing the advice gap

Read DP23/5 (PDF)[2]

We have published an update for stakeholders on our progress and next steps.

The update outlines the feedback from DP23/5 and how this has influenced our direction.

We will first focus on pensions. Consumers increasingly rely on defined contribution (DC) pension savings and must make complex decisions in relation to these, including how to access their pension savings. This is one of the most important financial decisions they will make.

Read the full update[1] 

Why we are consulting

We want people to be able to make informed decisions about their finances with confidence – and for people to have access to the help, guidance and advice to do so.

We want to support a healthy investment culture, where people have the confidence to invest as well as to save. This will not only benefit consumers but will also provide capital to drive the economy and boost growth.

Who is this for

Our proposals will primarily interest:

• consumers
• groups representing consumers’ interests
• life insurers
• all firms that provide pension products (both accumulation and decumulation)
• financial advisers
• investment platforms
• authorised fund managers
• retail banks
• trustees of DC occupational pension schemes
• financial coaches
• trade bodies for regulated firms
• any non-authorised persons providing support to consumers

Next steps

In December 2024, the FCA will consult on high-level proposals for targeted support in pensions, which would allow firms we regulate to provide support to pension savers in a new way.

Building on our pensions work, at the end of H1 2025 we plan to consult on rules for better support for consumers in retail investments and pensions.

Background

In December 2022, the Government announced a set of reforms taking forward its ambition for the UK to be the world’s most innovative and competitive global financial centre (Edinburgh Reforms[3]).

As part of these reforms, the FCA and the Government began a joint review to examine the regulatory boundary between financial advice and other forms of support. This is now known as the Advice Guidance Boundary Review (the Review).

The Government and the FCA want to build a framework which consumers can trust, recognising the complexity faced by consumers in making financial decisions.

The Review gives us the opportunity to enhance consumer experiences and outcomes by:

• rethinking the way advice and support are delivered to consumers
• taking advantage of new and emerging technologies

Our aim is to design a regulatory system where commercially viable models of advice and support can emerge so consumers can make effective financial decisions.

In December 2023, the FCA and the Government put forward proposals to help close the advice gap. We sought views on how we could better ensure there was affordable support for people to navigate difficult financial and investment decisions, to meet a variety of needs, in easy-to-access ways.