FCA proposals to simplify advice rules could unlock advice for millions of people with straightforward needs who are currently excluded by cost, complexity or process, according to Sam Christopher, proposition director at Quilter.
He was responding to the FCA's consultation CP26/10, ‘Simplifying the pensions and investment advice rules’.
Mr Christopher said simplified advice “would be a meaningful step towards closing the advice gap but it will only succeed if it genuinely changes how advice is delivered, not just how it is described.”
He said if the FCA gets the detail right, “these reforms together could materially widen access to advice. If it does not, the industry risks another well-intentioned reform that looks good on paper but changes little on the ground.”
Sam Beeby, UK head of mass affluent & premier banking at consultancy Capco said the FCA’s simplification of pensions and investment advice rules “will create clear winners and losers across the advice market. The firms that succeed will be those able to deliver the right level of advice at the right time and at the right cost, with more flexible and scalable service models built around customer needs.”
He said the clearest potential beneficiaries could be retail banks and other new or returning entrants to the advice market. “For incumbent firms, the biggest challenge will be increased competition and pressure on fees.”
The Investing and Saving Alliance (TISA) warned that the FCA had missed the opportunity to modernise the advice framework and prevent consumer harm from unregulated AI tools.
It urged action to safeguard consumers and industry from unregulated AI tools, which are conducting unauthorised financial activity without appropriate guardrails.
Sophie Legrand-Green, head of policy: consumer protection & access at TISA, said: “The growth of unregulated AI advice-like services can be a fantastic tool to democratise financial information and support. But consumers may be acting on unsuitable recommendations with no clear accountability, suitability assessment or route to redress.
“We urge the FCA to work with AI providers to build appropriate guardrails and signposts into LLMs, warning users about their limitations and the lack of regulatory protection and directing consumers to reliable, regulated forms of support and advice.”
All the comments came ahead of the deadline of Friday 22 May on the FCA’s consultation period. It announced the consultation in March.
The FCA said: “We are consulting on how to make it easier for firms to give more simplified forms of advice to consumers.”
It added: “We will consider the feedback and expect to publish a Policy Statement by the end of the year.”