Millions of UK consumers could soon benefit from free, personalised financial guidance under sweeping proposals announced by the Financial Conduct Authority (FCA), aimed at closing the country’s widening financial advice gap.
The City watchdog has launched a consultation on plans to allow banks, insurers, and pension providers to offer customers targeted financial support without needing to carry out a full individual financial assessment — a process currently required for regulated advice that is often time-consuming and expensive.
Under the proposed “targeted support” regime, financial institutions would be permitted to send tailored nudges and ready-made suggestions to customers, guiding them through complex decisions such as investing savings, choosing between pension drawdown and annuity options, or avoiding early depletion of retirement funds.
The move marks a significant departure from long-standing rules that have limited firms’ ability to offer specific advice unless formal requirements were met. According to the FCA, just 9% of UK adults currently access regulated financial advice, leaving millions to rely on informal or unregulated sources — including social media influencers and artificial intelligence tools.
Sarah Pritchard, Executive Director at the FCA, described the reforms as “once-in-a-generation changes that will help people navigate their financial lives with greater confidence.” She added that the new rules represent a “win-win” for consumers and financial providers.
Concerns over the lack of financial support have grown in recent years, particularly as around seven million UK savers hold more than £10,000 in cash but have not explored higher-return investment opportunities. Under the new framework, banks could prompt such individuals to consider investments in funds or stocks, offering accessible, actionable guidance — without crossing into regulated advice territory.
Financial advice has traditionally been expensive, often requiring customers to have over £200,000 in liquid assets to make the fees worthwhile. Advisers typically charge 1–3% upfront, plus annual fees of around 2%, pricing out many ordinary savers.
The proposals have drawn cautious optimism from consumer advocates. Holly Mackay, CEO of financial data platform Boring Money, said the plan could help up to 5.9 million people, but warned of a potential risk that some firms might use the guidance framework to drive product sales rather than offer unbiased help.
Others welcomed the move as a timely intervention. James Carter, Head of Platform Policy at Fidelity International, noted that many people are already relying on unregulated sources like TikTok or generative AI. “That could result in poor financial decisions,” he said. “I’ve heard stories of people using ChatGPT to make conclusive decisions about their financial futures.”
The Association of British Insurers also praised the initiative. Yvonne Braun, Director of Long-Term Savings Policy, said the proposals would help millions better navigate the overwhelming choices they face in retirement.
The consultation will remain open until 29 August, with a final policy statement expected by December. If approved, firms could begin offering targeted financial guidance to consumers from April 2026.
