The Financial Conduct Authority (FCA) and the Government have announced plans which aim to give people more access to advice while also enhancing the UK investment market.

The potential options set out by the Government and the regulator are designed to help more people benefit from investment opportunities, provide for later life, save for major expenses and tidy up their finances.

The FCA and the Government are seeking views as part of a joint advice guidance boundary review on three proposals to help people make more informed investment and pension decisions.

These include further clarification on when firms can give consumers support without giving regulated financial advice, an innovative new approach to allow firms to provide support tailored to groups of people in similar circumstances, and creating a new form of simplified advice that makes it easier for firms to provide affordable personal recommendations to clients with more straightforward needs and smaller sums to invest.

As part of its financial lives survey, the FCA found that only 8% of UK consumers received full financial advice in 2022.

The regulator has said that decisions on saving, investing and how to use their pension pots are "critically important" and some may struggle to make the right choice for them without help.

Economic secretary to the Treasury, Bim Afolami, said: "The gap between holistic financial advice that is unaffordable for many, and guidance that is free to access but not personal to the consumer, is simply too vast.

"This so-called ‘advice gap’ is excluding people with modest investments, who are looking for support that doesn’t break the bank.

"This just isn’t good enough – we have long needed a middle ground that is affordable and accessible. The policy paper that the Government and the FCA have published today will explore how we can achieve exactly that."

The FCA said that the proposals are an "important step" in examining how innovation could expand the market to new forms of advice and support, driving competition to better serve consumers, while maintaining consumer protections.

Executive director of markets and international at the FCA, Sarah Pritchard, added: "We want to open the door for more people to get the right advice or support to manage their money at the time they need it and at a cost they can afford. We’ve already helped firms test drive innovative solutions but we want to go further.

"This review will help us produce new rules to deliver this important step change for industry and consumers. It’s important we get this right and we welcome feedback on whether the proposals are right for consumers and for businesses."

---