A new overhaul of financial services will give millions of savers, pensioners, and bank customers access to free, tailored money advice. Under the proposed reforms, financial firms like banks, pension providers, and investment platforms will be able to offer direct suggestions on managing finances, even if customers have not requested them.
These changes, announced by the Financial Conduct Authority (FCA), are designed to address the longstanding “advice gap” that has left many individuals without essential guidance on crucial financial decisions.
As a result, customers will now receive targeted, ready-made financial advice aimed at helping them make more informed decisions about their savings, pensions, and investments.
Bridging the Advice Gap
Currently, financial advice is largely available only to those who can afford the high costs of private consultations, often amounting to 1-3% upfront and 2% annually. The FCA’s new reforms aim to bridge this significant gap.
According to the FCA, only 9% of adults currently receive regulated financial advice, with millions of others unable or unwilling to pay for it. The new regime will allow banks and pension providers to deliver advice-like suggestions based on customers’ characteristics, such as age or savings behaviour, without violating existing regulations.
The intention is to provide practical guidance on matters like how much to save for retirement or which funds offer better returns, which is expected to benefit those with pensions, savings accounts, or investment portfolios.
The move is being supported by organisations like Pension Wise and Citizens Advice, which are expected to play a role in assisting people who may feel overwhelmed by the new guidance.
Sarah Pritchard, Executive Director at the FCA, hailed the reforms as a “once-in-a-generation” opportunity to provide individuals with the support they need to navigate their financial futures.
The reforms are particularly timely given the increasing number of individuals with significant savings who could be earning higher returns but are hesitant to act due to a lack of knowledge or confidence.
Addressing Consumer Concerns
While the reforms have generally been welcomed by consumer groups, concerns remain about potential risks. Some campaigners worry that the changes could lead to the mis-selling of products, particularly if companies are not transparent about the advice they are offering.
The FCA has assured that these changes will stop short of providing full personal recommendations. Instead, the advice will remain general and will only apply to groups of individuals with similar financial characteristics, not specific individuals.
Experts, including James Carter from Fidelity International, have raised concerns about the rise of unregulated financial guidance online, warning that many individuals are now turning to platforms like social media or even AI tools like ChatGPT for financial advice.
The FCA’s move aims to provide a safer, more structured alternative to these often dubious sources.
The reforms, which are still in the consultation stage, could see the first customer guidance messages roll out as early as April 2026. However, the full impact of the changes will depend on the final policy decisions, which are due in December.
