The FCA plans to carry out a review of the advice/guidance boundary.

In a speech in the City today, FCA executive director Sarah Pritchard said the review will aim to understand “how to reduce the regulatory burden while continuing to provide the right level of consumer protection”.

AJ Bell head of retirement policy Tom Selby said: “The cost-of-living crisis and ructions in currency markets are dominating the headlines right now, with millions of savers and investors bombarded with information from all angles and facing often complex choices about what to do with their money. Those who are willing and able to pay for regulated advice are well served by the market and should be able to navigate through the current storm with a clear-minded focus on the long-term.

“However, those who do not take advice need better, more personal guidance so they can make financial decisions which are more likely to lead to ‘good outcomes’, in line with the FCA’s Consumer Duty. We welcome the FCA’s acknowledgment of this issue and urge the regulator to push forward its review at pace. A culture of fear has built around providing guidance that risks going anywhere near the blurred advice/guidance boundary, with firms and employers keeping a safe distance from the boundary and ordinary people receiving less help making decisions as a result.

“Although there will always need to be a boundary between advice and guidance, firms need a clearer understanding of where that boundary sits and what they can and can’t do. The Financial Ombudsman Service (FOS) needs to be included within this review process, as its interpretation of FCA rules will go a long way to determining how far firms are willing to go when providing guidance to customers. Ultimately it may require legislation from government to address the current advice/guidance impasse, but the announcement of this review is at least a step in a positive direction.”

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