The regulator had begun work on reforms aimed at nudging more consumers with lower asset pots towards regulated advice.

Following feedback to its joint consultation with the Treasury the regulator said today that it had become clear that getting more people to take regulated financial advice would, “not be met by changes to regulated advice alone.”

The regulator added that any solution, “will rely on support being provided on a commercial basis” and that its future review would “need to focus on outcomes” and “design a regulatory system where commercially viable models of support can emerge”.

The FCA released details today in an Advice Guidance Boundary document.

The FCA also published clarification for firms who want to provide guidance without providing a personal recommendation, including examples where a conversation with a consumer would not be classed as a personal recommendation.

Some providers have called for a simplified advice regime for some products to allow certain packaged products, such as ISAs, to be offered to consumers without the need for full Financial Planning advice. The FCA has also called for moves to encourage more investors to take on some investment risk and avoid leaving money for long periods only in cash savings accounts.

Sarah Pritchard, executive director of markets at the FCA, said: “It is vital that people get the help they need to make effective decisions – whether that be guidance or full financial advice from a qualified financial adviser. This is particularly so now, with the cost-of-living pressures. We want consumers to have greater confidence to invest, but to achieve that people need access to the right information to help them make decisions, understanding levels of risk.

“Our joint work with the Treasury in the months ahead will help to achieve that. In the meantime, and to see quicker improvements, we are taking steps now to give firms greater confidence to support consumers, pending broader reform, by clarifying the boundary of the current regime.”

The FCA said it will publish a full policy paper on the advice guidance boundary in the autumn.