The Financial Conduct Authority (FCA) has confirmed it is consulting on a simplified advice regime and laid out plans to help more people get financial advice for important decisions.

The regulator has suggested that simplified forms of advice can help consumers with more straightforward needs and do not require a full assessment of all their financial circumstances, making it more accessible and affordable.

While firms are already able to provide more simplified forms of advice, the FCA said that many do not offer it. To encourage open access, the regulator has proposed several small changes which it believes can “revitalise” the sector.

These include consolidating the suitability framework into one set of common rules, as well as clarifying the existing flexibilities in suitability rules with an expectation that advisers consider “sufficient” information.

The FCA also said it will make its suitability communications for firms more “concise, consumer-focused and proportionate”, and will introduce changes to give firms greater flexibility in how they design ongoing advice services. This would include moving from a fixed annual suitability review to periodic reviews based on clients’ needs.

“A market that provides good quality, lower cost simplified advice alongside comprehensive financial advice and targeted support will better support people making decisions about their financial lives,” deputy chief executive of the FCA, Sarah Pritchard, commented.

“We want to see more people getting supported, who aren’t currently, and a market that innovates and offers tailored services to meet differing consumer needs.

“We welcome everyone’s views on whether our proposals will achieve our aim of building firms’ confidence to offer a wider range of advice and ultimately to help consumers navigate their financial lives.”

The FCA also noted that it has already acted to help consumers get more support. From April, some financial firms will be allowed to offer targeted support and suggest products to consumers based on what they would recommend to those in similar circumstances.

While targeted support will enable support to be given to groups of consumers, the regulator said there will still be many consumers who will need individual advice tailored to their specific circumstances.

The FCA’s plans were praised by trade body for the financial advice market, PIMFA, as head of public affairs, Simon Harrington, said the decision to update its requirements for advice firms was “extremely welcome”.

“Giving firms the flexibility to deliver periodic assessments in line with consumer needs will encourage firms to develop new, innovative propositions for different client needs,” Harrington said.

“These proposals – and the accompanying guidance – should give firms the confidence they need to continue delivering high quality financial advice on an ongoing basis.”

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