Sweeping changes are on the horizon for millions of savers, pensioners, and bank customers who will soon receive free, personalised financial tips in what’s being hailed as ‘once-in-a-generation’ reforms. In a significant policy shift, financial institutions such as banks, pension providers, and investment platforms will soon have the green light to offer their customers direct ‘ready-made suggestions’ for managing their finances, even without a request.
The Financial Conduct Authority (FCA) has announced these reforms with the aim of closing a substantial ‘advice gap’ which has seen countless people making critical financial choices without adequate assistance, including decisions about retirement savings or identifying more valuable funds. At present, stringent regulations restrict firms to providing only broad advice unless the customer has opted into—and paid for—comprehensive financial counselling.
However, with the introduction of the new ‘targeted support’ framework, companies will be able to provide customised advice prompts without flouting the rules. This change is poised to benefit anyone with a pension or savings account, and consumer organisations like Pension Wise and Citizens Advice are expected to step in to help those bewildered by the new guidance.
Sarah Pritchard, executive director at the FCA, has characterised the reform as ‘once-in-a-generation reforms that will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike’.
Figures show 9 per cent of adults are currently benefiting from authorised financial advice, with the prohibitive costs – typically between 1–3 per cent upfront and around 2 per cent on ongoing annual fees – leaving many unable to afford it. The FCA is setting its sights on the estimated seven million people who have over £10,000 in cash savings and could be reaping better returns if they weren’t so hesitant to take action.
The reforms are being introduced against a backdrop of increasing concerns about the influence of “finfluencers” on platforms like TikTok, who often provide questionable financial advice. James Carter, head of platform policy at Fidelity International, warned: “That could result in poor financial decisions. I’m beginning to hear more and stories of people using ChatGPT to make conclusive decisions about their financial futures.”
Consumer advocacy groups have largely welcomed the FCA’s initiative but are calling for caution to avoid another mis-selling scandal. Although the advice won’t extend to full personal recommendations, campaigners are emphasising the importance of clear safeguards and transparency.
Yvonne Braun, director of long-term savings policy at the Association of British Insurers, commented: “We know facing complex financial decisions can feel overwhelming, especially in retirement. The FCA’s decision to press ahead with this crucial proposal is very welcome and should be a relief to millions of savers.”
The FCA has detailed how firms might utilise targeted support to suggest higher pension contributions for savers at risk of underfunding retirement, cheaper investment funds for customers stuck in poor-value products, and sustainable withdrawal rates for pensioners drawing down too quickly.
This support will be applicable to groups of customers with similar characteristics, such as age or savings behaviour, rather than individuals. Firms will require special permissions to offer such guidance and must avoid giving full personal recommendations.
Steven Levin, chief executive of wealth firm Quilter, commented: “The scale of the problem is stark. Just 9% of adults received regulated financial advice last year, despite millions holding investible assets… Targeted support could deliver scalable, structured help to consumer groups with shared characteristics.”
The reforms could also lead to changes to “simplified advice”, which would allow stripped-back personal recommendations at a lower cost – potentially for those wanting to invest a lump sum or change pension contributions.
The FCA’s consultation on the targeted support regime runs until 29 August, with the final policy statement due in December. If the plan is approved, the first customer guidance messages could roll out from April 2026. Among the firms already testing the approach is investment platform AJ Bell, which ran a trial earlier this year.
Tom Selby, public policy director at AJ Bell, said: “Millions of people who don’t take regulated advice are essentially left to make often complex retirement decisions on an island, without receiving the help they require.
“The proposal to create a new ‘targeted support’ regime could be a gamechanger.”
It remains to be seen whether the reforms will be enough to close the advice gap fully — or win over sceptical investors.
