SJP says that if the FCA proposals to allow ‘simplified advice’ or guidance are implemented without very clear guidelines consumers may feel they have received suitable advice “when, in reality, they haven’t.”

The FCA and Treasury published proposals today to open the door to simplified advice on financial products, allowing millions of consumers who cannot afford full financial advice to receive 'simplified advice' or guidance.

The radical shake-up proposed in the advice-guidance boundary is designed to help bridge the advice gap.

Ian MacKenzie, chief operations and technology officer at St James’s Place, said the proposals were sensible but were “no magic bullet,” as the FCA has stated.

He added that the limitations of the FCA’s ‘people like you’ proposals, allowing generic advice to be given to similar groups of customers, must be made clear.

Responding to the publication of the FCA Advice Guidance Boundary Review Policy Paper (DP23/5), he said: “We welcome the policy paper on advice guidance. As the paper states, there is unlikely to be a silver bullet solution.

“One way to fill the advice gap is through greater availability of advice, but we agree it will also likely need to include methods to help improve the availability of guidance, some form of simplified advice in a specific set of circumstances, as well as a greater public education about what is available. The proposed mix in the paper seems to be a sensible way to start.

“As we look to work together to find solutions, we will need to ensure a situation is not created where a consumer may feel they have received suitable advice when, in reality, they haven’t. The boundaries between guidance and regulated advice must not become blurred to the extent that consumers are unclear about the support they have received.

“This will be particularly important to ensure that consumers who receive a 'people like you' suggestion are fully aware of the limitations of that guidance and that the product suggested may not be suitable. We will continue to work alongside our industry peers, Government and FCA to collectively address this issue.

“The benefits for taking advice are very clear. It makes a considerable difference to an individual’s future financial health and provides the financial confidence needed to navigate life events and periods of uncertainty, particularly when markets prove more challenging. Addressing some of the barriers to advice and better connecting people with the help they need can encourage people to take those first steps towards investing for their futures. Better planning not only serves an individual’s long-term ambitions, but also supports the economy to grow.”