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Home Banking Treasury and FCA’s proposals for greater relevancy and personalisation – HL comment

Treasury and FCA’s proposals for greater relevancy and personalisation – HL comment

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Treasury and FCA’s proposals for greater relevancy and personalisation – HL comment

  • Changes to the Advice Guidance Boundary (AGB) has the potential to transform investment and pensions choices.
  • In 2022 only 8% of the population accessed financial advice in the previous year, leaving the rest with generic guidance.
  • The Review explores further work to clarify the boundary, a new form of targeted support and simplified advice.
  • Hargreaves Lansdown believes targeted support can transform how we all save and invest for our future.

The HM Treasury and FCA consultation on the Review of the Advice Guidance Boundary closes on 28 February.

Anne Fairweather, head of government affairs and public policy, Hargreaves Lansdown:

“If implemented ambitiously, proposals for target support will be transformative to the way people engage with financial services and make informed saving and investment decisions for a better future. Hargreaves Lansdown has been campaigning for this review of the advice/guidance boundary for years.  We regularly come up against the boundary when we’re communicating with our clients.  We know that there is more we could do to drive good outcomes for clients, if we were able to personalise the guidance they receive.  Whether it’s helping a client to understand retirement options or which investment path to take, allowing for greater relevancy and personalisation will help us all manage our finances more efficiently.  To this end we are very supportive of the concept of targeted support explored in the review. 

Helping clients is often about curating choices. Behavioural science shows the power of recommendations based on ‘people like you’ which the targeted support regime is designed to support.  In some instances, this may take the shape of improvements in communications, in other areas it may be embedded into journey design to improve decision making or result in the development of financial coaching services.  The key for the new regime is to leave space for innovation.  The approach should focus on creating a regulatory framework in which firms can confidently iterate ideas to drive innovative solutions to client problems, whilst measuring outcomes. Consumer understanding will be extremely important, but we are urging the FCA to steer away from prescriptive disclosures as the use cases for targeted support are likely to be varied.  This is about designing a framework for the next decade which will allow firms to invest in data analytics and digital journeys to improve client outcomes.

We urge the Government and FCA to press ahead with these changes.  A great deal of thought has been given to this topic over the last year, people need support now, so let’s work to bring a new approach into place for 2025.”

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