This is joined up, right way round thinking from the regulator. Financial advice currently centres around complex suitability homework which gets in the way of finding simple, affordable solutions. “What we need is simple solutions, with clear pathways that don’t make people feel anxious – solutions that are easy enough that people will actually do it. Get it right and the financial services industry can find simple solutions that break down barriers to advice and crucially, reduce the advice gap. It will determine whether we can begin to change the narrative around long-term financial wellbeing. Richard Wilson, chief executive of Interactive Investor, said: “This is a watershed moment in the UK. Subject to the responses received, it aims to publish a final policy statement and finalise rules and guidance in spring 2023 and is targeting implementation of the regime before the end of the 2023/24 financial year, so firms will be able to start offering core investment advice from the beginning of April 2024. The FCA wants feedback on its proposals by 28 February 2023. 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.” 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. Allowing greater flexibility in charging structures to allow consumers to pay for transactional advice in instalments.Īs part of the regime, the FCA said it will create a new handbook definition of core investment advice, which states advice may only be given on investments into a new stocks and shares Isa, advice may only relate to investments up to the value of the annual Isa subscription limit set by the Treasury and advice may only be given on a sub set of investment products held within a stocks and shares Isa.Limiting the possible investments that advisers can recommend under the regime to a set of mainstream investments by excluding any recommendations to invest in high risk investments and.Reframing the existing suitability requirements to reflect the narrower scope and complexity of the advice relevant to the decision that consumers will be making. Proportionately reducing the existing qualification requirements to reflect the lower risk of the advice, focused on only the necessary technical and regulatory understanding to advise on mainstream investments.The FCA is proposing the following changes: The UK regulator said it does not specifically authorise or regulate stocks and shares Isas and does not recommend any specific S&S Isas or investments held in them, however, it views them as “appropriate investment wrappers given their accessibility and cost effectiveness which helps consumers step into the world of investing”. It also added this regime will make it easier for firms to provide advice that is proportionate to the needs of the consumer at a lower cost in a bid to help consumers who are holding large sums in cash to invest, potentially for the first time, into stocks and shares Isas. The FCA said the changes will allow firms to provide mass market consumers with straightforward financial needs greater access to simplified advice on investing into mainstream products, specifically within stocks and shares ISAs. The Financial Conduct Authority (FCA) has launched a consultation paper on proposals for a separate, simplified financial advice regime.
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