The Financial Conduct Authority (FCA) has published its latest proposals for targeted support as part of the Advice/Guidance Boundary Review, seeking to bridge the ‘advice gap’.

Under the consultation’s proposals, firms would be able to offer targeted support to consumers and provide suggestions to groups of consumers with common characteristics.

These consumers could include people who have excess cash sitting in a current account, or those who are drawing down on their pension unsustainably or not saving enough for retirement.

The FCA said that the changes have inbuilt protections for consumers, and would support growth by enabling more investment and innovation.

The reforms should set the framework for the next 20-30 years, the regulator noted, to also support future generations.

“We want to help consumers navigate their financial lives and plan for the long term,” commented FCA deputy chief executive, Sarah Pritchard.

“Some of the most difficult financial decisions we face are how to save, invest and prepare for a comfortable retirement.

“These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike.”

The FCA said that it wanted to see a “thriving and trusted” market for full financial advice, simplified advice, targeted support, and guidance.

Alongside the targeted support proposals, the regulator outlined its plans to reform the framework for simplified advice.

It agued that consumer access to a choice of full financial advice, simplified advice, targeted support, and guidance should help reduce the advice gap, and support its ambition for consumers to have the access to the help and guidance they need to make informed decisions.

In developing its proposals, the FCA ran a six-week policy sprint, where firms designed consumer journeys to help design the rules in the consultation.

It also completed “detailed” consumer testing that has been published alongside the consultation, which is now open for eight weeks.

Commenting on the proposals, Nutmeg head of financial advice and guidance, Claire Exley, said: “Targeted support is a much needed and welcomed first step in closing the advice gap.

“We know clients are looking for guidance that is relevant to them, their situation at the time it’s right for them. ‘People like you’ scenarios will hopefully help consumers to build confidence in their own decision making – we’re aware that often people are looking for reassurance that they’ve arrived at the ‘right’ decision – rather than being told what the decision should be.”

Hargreaves Lansdown CEO, Dan Olley, added: “Access to tailored, relevant, and timely prompts and guidance help build confidence and understanding, which are the critical building blocks to encouraging more people to engage with their finances, overcome inertia and get investing successfully for the long term.

“For the first time, we will be able to provide targeted support that is much more relevant for each of our clients. We will be able to tailor conversations and the digital experience to where they are in their investing journey, helping them see the potential of certain choices, which could have large positive impacts on their financial outcomes over the long term.

“We can also be even more present at those critical life stages such as the move into retirement, where we will be able to guide people more effectively in how to make the most of their accumulated assets to ensure they realise the financial freedom they have saved and invested for.”

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