I suspect many Financial Planners are still in two minds about the FCA’s targeted support plans which moved a step forward this week with a provisional go-live date of April.

The fact is that very few Financial Planners have anything to fear from targeted support which will provide ‘nudge type’ advice to some 18m on financial products such as investments, pensions and the like.

With only 9% of consumers currently paying for financial advice, over 90% of the population are unable (or unwilling) to pay for professional advice and that’s the reality. It’s no wonder so many people make such rotten financial decisions.

The FCA says targeted support, “is a flexible and futureproof framework underpinned by the Consumer Duty. It will enable firms to innovate and better support their customers.”

And they may well be right, only time will tell.

From what I've seen, I don’t think targeted support will undermine professional financial advice and it could well act as a gateway towards more getting financial advice.

Past research has shown that when people’s assets reach a particular level they will begin to think about getting financial advice. I can image some consumers ‘nudged’ to start an investment ISA or similar under targeted support will eventually begin to feel the need for professional financial advice in due course.

With this in mind targeted support could help transform the finances of millions and is very much a common sense step to bridge the so-called advice gap.

It cannot make sense for millions to receive virtually no guidance because providers - or advice firms - are too nervous to provide help for fear of falling foul of the existing stringent rules and regulations.

One development I hope to see, perhaps from the bigger Financial Planning firms, is the launch of new targeted support services to help reach a new audience eager to invest and save for a pension but lacking the funds to afford financial advice. We’ve already seen some positive steps in this direction and there is more to come, I hope.

Managing money should not be seen as an expensive hobby for the rich or well off but instead as a normal part of life. Having an investment or pension plan should be as normal as insuring your car or home and should, in time, be seen as an essential for many.

The FCA is ready to help firms get into targeted support and I have no doubt many will be contacting the FCA in the coming weeks. The financial advice / financial guidance sector needs to be much bigger in the UK if it is to be of service to the nation and targeted support, if done well and with clear rules, is one way to do it.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin 

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