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\t\tThe FCA said the need for greater support was “stark”\t<\/p>\n
More than 18m savers will benefit from more detailed advice on their investments and pension in the next decade as part of a radical shake-up of financial red tape that the City watchdog has hailed as \u201cgame-changing\u201d.<\/p>\n
The Financial Conduct Authority\u2019s<\/a> \u2018targeted support programme\u2019 will give financial services firms the ability to give tailored suggestions to customers in a bid to improve investment decision-making and boost investment in productive parts of the economy.<\/p>\n Under the new rules, consumers will be able to ask financial platforms or pension providers for advice that does not need to be based on a holistic assessment of their individual needs.<\/p>\n The shake-up, after which firms will still need to prove the advice they provide is suitable and likely to improve a customer\u2019s financial position, could be introduced as soon as April. Providers like major investment platforms, pension funds or wealth management companies will be able to apply for a licence in March.<\/p>\n \u201cTargeted support will be game changing,\u201d said Sarah Pritchard, deputy chief executive of the FCA. \u201cIt means millions of people can get extra help to make better financial decisions.\u00a0\u00a0<\/p>\n \u201cWe also hope it will build greater confidence to invest. While investing will not be right for everyone, we know people in the UK invest less compared to the EU or US. People in the UK could be missing out on the potential benefits of investing in the medium to long term.\u201d\u00a0<\/p>\n FCA dials up response to growth push<\/p>\n According to the watchdog\u2019s own data, roughly 7m Brits with more than \u00a310,000 in cash savings have over 75 per cent of their nest eggs in cash. The UK\u2019s comparatively low investment appetite has provoked fears savers\u2019 investments are particularly vulnerable to the effects of inflation and are not being put to use investing in growth-enhancing companies and funds.<\/p>\n Currently, most financial services platforms are unable to give retail investors even broad steers on how to allocate their savings or where to put their pension unless it comes from a qualified financial adviser. But official financial advice can be prohibitively expensive or complicated to arrange, leaving many savers exposed to what the FCA has called the \u201cadvice gap\u201d.<\/p>\n Jessica Reed, financial services and funds partner at law firm\u00a0Farrer\u00a0& Co<\/a> said the overhaul should give firms \u201cmore leeway to provide product suggestions\u201d safe from the risk they are \u201cstraying into financial advice for which they would have to take a full assessment of the customers\u2019 financial position\u201d.<\/p>\n \u201cConsumers should also have more confidence to take decisions about their finances,\u201d she told City AM.<\/p>\n The overhaul is the latest in a string of pro-growth measures announced by the watchdog. It has already announced plans to loosen the way it polices the mutual sector and relax its rules on the way financial firms<\/a> can communicate to customers in the last week.<\/p>\n \t\t\t\t\tRead more<\/p>\n