The “reimagining” of advice and guidance: FCA speech provides update on targeted support

The FCA's chief executive, Nikhil Rathi, has given a speech on improving consumer outcomes in the pensions, savings and mortgages markets through better returns, risk alignment and support.

The speech touches on a number of topics including the pensions dashboard and pensions access to private markets, as well as improving and simplifying mortgage regulation, and taking a holistic approach across retail markets so that pensions, mortgages and savings are not treated as “separate tracks”. 

The speech also provides further insight into the FCA's latest thinking on the Advice Guidance Boundary Review (AGBR) and its ambitions to “build a healthier national investment culture”.  

The proposed new model of targeted support for pensions and investments is addressed directly (see our previous blog posts here and here). Insights include:

• The fundamental ambition to support groups with shared needs at lower cost, so more people can take informed risks.
• The FCA's policy sprint giving 12 firms the opportunity to design, build and test the consumer facing element of a cash to equity targeted support journey.
• The FCA working closely with the Financial Ombudsman Service to address concerns that they may treat targeted support as though firms were providing personalised advice, with the speech confirming that targeted support is “distinct”.
• Targeted support working hand-in-hand with pensions dashboards to increase consumer awareness. 
• The acknowledgement that outcomes will not be even across the board and that, in providing suggestions designed for groups, targeted support will not be optimised for every individual - “a necessary trade-off to improve outcomes for as many consumers as possible”.

With the continued momentum behind the targeted support proposals, firms will continue to await with interest the expected consultation on detailed rules on the targeted support framework in the summer. 

It is no exaggeration to say that we want our Advice Guidance Boundary Review to trigger an advice revolution.

https://www.fca.org.uk/news/speeches/right-track-connecting-consumers-products-and-growth