The Financial Conduct Authority (FCA) has announced new changes to investment advice rules in what it described “once-in-a-generation” reforms.

Proposals from the regulator would allow firms to offer a new type of help it has called “targeted support” and make suggestions to groups of consumers with common characteristics.

These could include individuals who may currently not be saving enough for retirement, drawing down on their pension unsustainably, or who have excess cash sitting in a current account.

A statement from the FCA indicated that these could set the framework for the “next 20-30 years”, to support consumers now as well as future generations.

The regulator said it wants to see a “thriving and trusted market” for full financial advice, simplified advice, targeted support and guidance. Alongside its proposals for targeted support, the FCA has also set out plans to reform the framework for simplified advice.

“We want to help consumers navigate their financial lives and plan for the long term,” said deputy chief executive of the FCA,” Sarah Pritchard. “Some of the most difficult financial decisions we face are how to save, invest and prepare for a comfortable retirement.

“These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest. This is a win-win for consumers and firms alike.”

According to the FCA’s recent latest Financial Lives survey, there are about seven million adults in the UK with £10,000 or more in cash savings who may be missing out on the benefits of investing throughout their lives.

These findings also indicated that just 9% of adults received financial advice about their pensions or investments in the previous 12 months.

Of those who did not receive financial advice, but hold £10,000 or more in cash savings, 24% said they don’t invest because they don’t know enough about it, 12% because they feel overwhelmed by the number of options available, and 8% said they would need more support before they invest.

The regulator’s plans have been welcomed by those in the financial advice sector, with head of public affairs at PIMFA, Simon Harrington, suggesting the FCA and Government deserve “enormous credit”.

“We believe [the proposals] can be transformational to the way in which UK consumers interact and engage with their finances, and pension savings in particular,” Harrington commented.

“We want to ensure that all consumers across the spectrum are able to make better investment decisions throughout all stages of their lives. The introduction of targeted support will, in our view, be fundamental to ensuring that consumers have access to high quality support at the stages in their lives when they need it most.

“Although we strongly believe that regulated financial advice and planning is what delivers the very best outcomes for consumers, we also recognise that nearly 25 million people in the UK have never received any form of financial advice or guidance. This needs to change, and the proposals outlined today will help bring about that change.”

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