Measures to help close financial advice gap proposed by regulator

Andrew Prosser, head of investments at InvestEngine, said: “We welcome the FCA’s proposals and, in particular, the fact that progress is being made on simplified advice. There is a clear advice gap in the market today, leaving many consumers without access to support for relatively straightforward investment decisions. We therefore support the FCA’s direction of travel in seeking to make the suitability framework more workable for limited-scope advice, while maintaining appropriate consumer protections. In our view, greater clarity that firms can take a proportionate approach to information gathering and suitability assessments is an important step towards making investing more accessible and affordable for consumers.

“We are encouraged by the FCA’s recognition that not every investment journey requires an exhaustive fact-find or highly complex suitability process. Many consumers are simply looking for help making sensible long-term investment decisions, for example, investing in a diversified portfolio aligned to their objectives and risk profile. The proposed shift towards a more proportionate framework should give firms greater confidence to design journeys that are focused, understandable and practical for customers, without undermining the quality of the outcome. We also welcome the FCA’s emphasis on clearer, more consumer-friendly suitability communications, as this should help reduce unnecessary complexity for firms and customers alike.”