Industry welcomes FCA simplified advice push but flags risks and delivery challenges

The Financial Conduct Authority’s (FCA) consultation on simplifying pensions and investment advice rules has been broadly welcomed by industry stakeholders as a step towards closing the advice gap, although concerns remain around execution, risk and commercial viability.

The Simplifying the Pensions & Investment Advice Rules consultation aims to help more people get financial advice for important decisions, working alongside targeted support to enable consumers to access a range of advice services.

A consistent theme emerging from initial reactions is that the proposals could significantly widen access to advice, particularly for consumers with more straightforward financial needs, but only if firms were given sufficient clarity and confidence to act.

EY UK & Ireland wealth and asset management leader, Dan Hall, described the consultation as “a welcome step forward in addressing the UK’s long-standing advice gap”, pointing to research showing that cost concerns and a lack of confidence continued to prevent many savers from seeking support.

He noted that for practical decisions, such as pension contributions or investing surplus cash, full holistic advice can feel unnecessarily complex or out of reach, causing many to delay action.

Therefore, Hall suggested that simplified advice could form part of a more “graduated advice model”, sitting alongside targeted support and full financial advice, and increasingly delivered through digital channels.

However, he stressed that success would depend on firms redesigning advice journeys, including the responsible use of data and AI, while maintaining consumer protections and trust.

Indeed, while there was clear support for improving access, several respondents warned that simplifying advice must not introduce new risks, particularly given the inherent complexity of pension planning.

The UAP Group group CEO, Rob Shipman, said that although more accessible advice was needed, “any form of simplification must be approached with care”.

He highlighted tax planning as a key area of complexity, noting that decisions around contributions, withdrawals and investments were closely linked to an individual’s wider financial position.

Shipman cautioned that consumers could assume simplified advice reflected their full circumstances, when in reality it may be based on narrower inputs, potentially leading to misunderstanding, suboptimal outcomes and unexpected tax liabilities.

He argued that clear boundaries, transparent disclosures and strong governance frameworks would be essential, alongside greater clarity on where simplified advice sat within the regulatory perimeter and how liability would be assessed.

Other commentators emphasised the potential for the reforms to reshape how financial advice is delivered in the UK.

Broadstone head of personal financial planning, Rob Hillock, said the proposals “could fundamentally change" how people accessed financial help, particularly if a wider range of providers, including banks and insurers, begin offering simplified advice.

He noted that while this could improve access, it may also shift the market towards more product-focused solutions.

Hillock added that ensuring consumers understood the distinction between guidance, targeted support and full advice would be critical, as would giving firms the confidence to engage with customers without excessive regulatory risk.

Similar concerns around delivery were raised by St. James’s Place director of public policy, James Heal, who said the consultation was a “welcome step” in clarifying ongoing advice requirements and recognising the need for flexibility, but warned that further work would be needed to ensure simplified advice was commercially viable and capable of genuinely widening access.

Echoing this, Quilter chief distribution officer, Steve Gazard, also described the proposals as an “important step”, highlighting that many consumers currently faced a binary choice between comprehensive advice and no regulated support at all.

He welcomed the FCA’s decision to consolidate and streamline existing rules rather than create a new regime, arguing that greater flexibility around “sufficient information”, suitability reporting and periodic reviews could enable more proportionate advice delivery.

Gazard suggested that simplified advice, alongside targeted support, could help create a clearer continuum of services, enabling consumers to access the right level of support as their needs evolve.

However, he warned that alignment with the ombudsman on how simplified advice would be assessed was critical to ensure firms felt confident operating within a more outcomes-based framework.

The consultation closes on 22 May 2026.

This article originally appeared in our sister publication Pensions Age.

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