In December, the Financial Conduct Authority published a policy statement that defined almost final guidelines for a new regulatory framework. This particular regulation will target the support that clients receive in retail investments and pensions. Let’s take a closer look.
Why has the FCA done this?
FCA compliance consultants such as //www.adempi.co.uk/ know that the FCA’s framework evolves regularly, and financial services providers must stay up to speed. This new initiative has been created to help overcome the current advice gap for consumers and ensure there are enough affordable and accessible financial suggestions made to consumers who are keen to invest.
What will the new approach deliver?
Under the new regime, authorised financial services firms will be able to deliver ready-made ideas to their clients, based on consumer groupings with similar needs, characteristics, or objectives. This will help their clients to better and more confidently save and invest for retirement.
Unlike more traditional forms of regulated financial advice, this targeted support will not require the provider to deliver individual assessments based on personal circumstances. Instead, they will be able to use customer segmenting to make tailored recommendations, so that financial advice can be more affordable, accessible, and scalable to the population. This support will also be regulated under the Regulated Activities Order, meaning it will only be provided by authorised firms.
The move will also help the government to encourage people to save for the future and to move more of their savings into investments, which tend to offer more attractive returns in the longer term than fixed income products.
