Millions of Brits have more than £10k in the bank and ‘need cheaper investment advice’

Letting people seeking financial advice pay in instalments is one of several measures the financial watchdog is looking into as they look for ways to make investing more accessible.

The Financial Conduct Authority (FCA) has set out new proposals to ensure people’s access to financial advice is cheaper and easier.

The regulator is exploring the possibility of streamlining the customer ‘fact find’ so advice is more straightforward for both firms and customers.

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It also looking into limiting the range of investments within the new regime so the advice is easier to deliver and understand.

The FCA wants to make the qualification requirements for the new regime “more proportionate” so that delivering the simplified advice is cheaper for firms.

But the key measure for prospective and current investors is the watchdog’s proposal of allowing advice fees to be paid in instalments so customers aren’t burdened by large upfront bills.

“Now more than ever, people across the UK should have access to useful and affordable financial products and services which can improve their quality of life and support the economy,” Sarah Pritchard, executive director of markets at the FCA, said.

“These proposals are part of our work to deliver a consumer investment market where people can readily access support and firms aren’t deterred from providing it,” she added.

The watchdog’s recent Financial Lives survey found 4.2 million people in the UK held more than £10,000 in cash and are open to investing some of it.

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The FCA said the proposed changes aim to prevent in-person financial advice from being too costly for many potential investors, as this can stop them from investing when it may be in their interest to do so.

The watchdog added that it recognises that adjusting the regime could help the advice market support mass-market consumers with simpler needs.

Jason Hollands, managing director at Bestinvest, said: “It’s well established that there is an advice gap in the UK with many millions of people who would undoubtedly benefit from professional support in making sound decisions on how to build-up their long terms savings and investments not getting access to the help they need. A great many people either don’t know where to turn to, perceive full financial planning advice as only aimed at wealthier people or assume that the fees will be prohibitive. The fragmented UK financial advice sector is comprised of over 5,000 firms, many of which are sole traders and 89% of which have five or less advisers. They often lack the scale to economically take on large numbers of clients with more modest amounts of savings and investments.

“It’s our ambition that as many people as possible can access good advice so that they can make better decisions. It will bring long term benefits to the UK if people are better prepared for retirement and other long-term goals."

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