'The financial services industry is set to offer more accessible and effective help than ever before'

There has been a lot of talk in the industry about how “personalised” or "regulated” guidance can help bridge the gap in providing better financial help across the UK.

As part of the industry working group inputting to the review, I am feeling very positive about how the Financial conduct Authority and HM Treasury are responding to this challenge. 

Rethinking old approaches

The decision to halt the plans for simplified advice should be applauded. It is clear that improving how people make financial decisions needs more than just a tweak here and there.

The recent announcements show that we are looking at a bigger solution – one that tackles the real challenge of providing accessible and effective help that supports people with their money choices.

This shift in focus is a positive sign, as both the regulator and Treasury acknowledge the need for significant change.

A new approach has the potential to alter how people access financial guidance and advice, leading to better financial wellbeing for everyone.

What is regulated guidance?

The idea of "regulated guidance" has a lot of potential. It means creating more helpful ways to guide people through their financial choices. But what could that look like?

We will have to wait until the autumn discussion paper to know for sure – however, we envisage that regulated guidance could enable firms to highlight considerations relevant to someone’s individual circumstances.

A more personalised form of help than today, it could filter and present relevant options when making financial decisions – however, it would fall short of providing a recommendation (which would be advice).

Working together: guidance and advice

What is really interesting about any new regime is how it could work with financial advice. If more comprehensive guidance is available, people will get clearer insights into their financial decisions.

I have no doubt any new approach will see guidance and advice complement and connect – they are partners, not competitors.

As guidance becomes more meaningful and insightful, this will increase the value people place on the personal recommendation that only advice can bring.

Balancing risk and consumer duty

In its latest update, the FCA shared the need to manage risk rather than avoiding it altogether. This is a refreshing perspective.

Potential new regimes and the consumer duty's focus on outcomes creates a chance for the financial industry to shine.

Inevitably this will be powered by technology that delivers digitised experiences, underpinned by a clear audit trail and codified rules.

Technology will play a key part in managing risk while scaling the access to help that people need.

What the regulator is saying

The recent update from the FCA shows that the advice-guidance boundary review is all about ensuring people get affordable help when they need it, which I think we all support. As we know, not everyone wants, or more importantly needs, financial advice.

The FCA points out this is not just about changing how advice works. We need the industry to offer flexible forms of help that reflect different financial situations, while acknowledging that these can change over time. 

The expectations set by the consumer duty are a helpful backdrop to the advice-guidance boundary review.

However, equally important is the proactive collaboration between the FCA and the Financial Ombudsman Service.

Any new regimes must navigate providing consumer protection while enabling the growth and innovation required to achieve success.

The advice-guidance boundary review and a potential new regime for more helpful guidance mark a significant shift in financial services.

This shift goes beyond the traditional lines of advice and guidance, focusing on comprehensive support that empowers people to make better financial choices.

By recognising the important link between guidance and advice, embracing risk management and using the principles of consumer duty, the financial services industry is set to offer more accessible and effective help than ever before.

As we wait for the discussion paper, we are getting closer to a society that is better equipped to handle their finances and make smart decisions.

The sooner this becomes a reality the better.

Ben Hampton is chief executive of Wealth Wizards