The Financial Conduct Authority (FCA), the UK’s market regulator, is now planning to review the current regulations concerning the provision of advice for investment clients in Britain.
In a recent announcement in London at the Future of UK Financial Services Regulation Summit, FCA executive director, Sarah Pritchard, stated that due to the costs involved, often only relatively well-off individuals can obtain advice on investments. As a result, mass market consumers are quite often left to navigate what can be a large and confusing choice of products with minimal support, she commented:
“As part of the FCA’s Consumer Investments Strategy, we have said that we want to establish a simplified advice regime for mainstream stocks and shares ISAs where the risks to consumers are relatively low.”
UK consumers looking for unbiased investment advice in Chester, London and other major cities often consult wealth management firms for help. As impartial financial advisors, wealth managers can guide their clients on the risks and returns involved in investments using plain and easy-to-understand language.
The distinction between guidance and advice was made when the 2007 Markets in Financial Instruments Directive was introduced. It requires companies to make a complete suitability assessment of their client’s personal financial circumstances before advice is offered.
The FCA is now seeking to lessen this regulatory burden with the goal of cutting the cost of the fees that firms must charge to make advice on more mainstream investments a more accessible and affordable option. It will now conduct a review of the current regulatory boundary between guidance and advice, while still providing protection for UK consumers.
