The Financial Conduct Authority wants to see healthy competition in financial services and does not want small firms to drop out of the market due to increased regulation.
Kate Blatchford-Hick, head of consumer investments at the regulator, spoke to a room full of advisers about the FCA’s advice guidance boundary review, published in December, and told them there was the opportunity to “shake-up” policy thinking.”
At a Lang Cat Live event on Thursday (February 8), Blatchford-Hick was pressed on the perception the FCA would prefer to deal with a small number of large firms rather than a thousands of small firms.
Blatchford-Hick stressed the FCA does listen to feedback from smaller businesses, pointing to the core investment advice regime proposed in 2022 and dropped in August last year due to a lack of support.
She said: “[The core investment advice regime] was a proposal for simplified advice focused quite specifically on Isa investment.
“The feedback we had to that consultation was that the proposals were just not financially viable.
“We really listened to that feedback and what you see in the proposals for simplified advice is an expansion of that thinking.
“It proposed an expansion of the scope of situations where simplified advice could be given.
“I would also say that I absolutely recognise that diversity is important in the sector and healthy competition is really important.”
However, Blatchford-Hick added the FCA’s targeted support proposals are likely to be delivered at scale and therefore more suited to larger firms.
Blatchford-Hick told delegates simplified advice would be transactional one-off advice and the aim would be to meet the needs of mass market consumers.
"We are aware of course, this is not the first time we've considered simplified advice, which today has not been widely adopted," she said.
“However, this time post-Brexit, we have more freedom to design a regime that works for you.
“It's our intention to make best use of this opportunity."
She added: “We also recognise that the propositions offered by firms and demand by consumers may continue to evolve. So by providing targeted support, it may lead to a greater market for simplified advice.”
Blatchford-Hick urged people to respond to the FCA’s consultation which closes on February 28.
“We think these are exciting times," she said. "There is an opportunity here to help illustrate how the sector develops going forward.
“We really do listen, your thoughts are critical in helping us change our policy proposals and making them a success.
“I really believe that there is a huge opportunity here for firms to send to demonstrate the value you can provide to your clients and consumers.”
tara.o'connor@ft.com
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