The U.K.’s Financial Conduct Authority (FCA) has finalized the rules for its new regime that aims to address the “advice gap” among retail investors.
Following a consultation on the rules for its so-called “targeted support” framework, the regulator issued a policy statement confirming the final rules. The new framework aims to enable firms to provide generic advice on retail investments and pensions for clients that could benefit from advice but may not have the assets to justify bespoke advice.
“Pensions and retail investments have a vital function allowing people to build wealth and provide income for later life. We want consumers to be confident making decisions about their pensions and investments,” the FCA said.
The regulator said it estimates that about 23 million investors are currently underserved in terms of investment advice, and it’s hoped that the new regime will help address that shortfall.
“Targeted support will allow firms to provide suggestions designed for groups of consumers with common characteristics to help them make important decisions across their pensions and investments,” it said.
The rules set out a framework on the “design, delivery and purpose” of targeted support services.
Alongside the final rules, the FCA also published joint statements with the U.K.’s Financial Ombudsman Service, which clarifies how they will work together to deal with complaints involving targeted support services — and with the U.K.’s Information Commissioner’s Office on marketing requirements in this area.
Firms will be able to apply for regulatory permission to provide targeted support services starting March 2, and the new regime will launch on April 6.