The UK government and the financial conduct authority (FCA) have introduced a proposal which would simplify rules on consumer financial advice.

As part of the ongoing joint Advice Guidance Boundary Review, the proposal would see banks, insurers and investment firms able to give information to less wealthy customers without having to meet requirements that bump up fees.

The government said it would do this by clarifying the “regulatory boundary” to clarify when firms can give consumers support without giving expensive regulated financial advice and cheaper forms of information and support.

In a statement, the FCA said that only 8 per cent of UK consumers received full financial advice in 2022, adding that Brits may struggle to make the right decisions on saving, investing and how to use their pension pots.

Sarah Pritchard, executive director of Markets and International at the FCA, said: 'We want to open the door for more people to get the right advice or support to manage their money at the time they need it and at a cost they can afford. We’ve already helped firms test drive innovative solutions but we want to go further.

“This review will help us produce new rules to deliver this important step change for industry and consumers. It’s important we get this right and we welcome feedback on whether the proposals are right for consumers and for businesses.”

Bim Afolami, Economic Secretary to the Treasury, added: “We have long needed a middle ground that is affordable and accessible. The policy paper that the government and the FCA have published today will explore how we can achieve exactly that.”

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