Banks Set to Offer Free Investment Suggestions to Bridge UK Advice Gap
New FCA rules aim to improve financial confidence and help millions make smarter investment choices
Major Shift in Investment Advice Rules
Starting April 2026, UK banks and financial firms will be allowed to offer free, targeted investment support to customers under new guidance from the Financial Conduct Authority (FCA). This marks a major step towards closing the UK’s long-standing “advice gap” — the gap between those who want investment advice and those who can afford to pay for it.
This initiative is designed to empower savers to make more informed investment decisions without the high cost of personalised financial advice.
Why the FCA Is Taking Action
Millions of Britons currently hold large sums in cash savings but miss out on better returns from investments due to uncertainty or lack of access to advice. According to the FCA:
- 7 million UK adults have over £10,000 in cash savings
- 1 in 10 have no savings at all
- 21% have under £1,000 for emergencies
- Only 9% received regulated advice in the past year
The FCA hopes this new support will:
- Build public confidence in investing
- Help people move beyond low-yield savings
- Encourage smarter pension planning
Sarah Pritchard, Deputy Chief Executive of the FCA, called the move “game changing”, saying it could help millions make better financial decisions.
What Will This Support Look Like?
Unlike costly one-to-one advice from certified financial advisers, this new form of “targeted support” will provide generalised guidance tailored to demographic groups.
Examples include:
- Suggesting how to invest a lump sum
- Explaining diversification to lower risk
- Highlighting suitable savings or pension products
It’s not personalised advice, but tailored based on financial situation, age group, and savings habits. And most importantly, it’s expected to be free of charge.
Banks and platforms that wish to offer this service must:
- Be FCA-authorised
- Clearly explain that it's not personalised advice
- Ensure recommendations improve customers’ financial situations
- Consider individual vulnerabilities
- Offer access to the Financial Ombudsman for complaints
Who’s Supporting the Change?
Industry experts and commentators broadly support the move:
- Yvonne Braun, Association of British Insurers:
“This marks a significant step toward closing the advice gap.”
- Colleen McHugh, consultant at Wealthify:
“It’s long overdue. Many women are more risk averse, keeping savings in cash rather than investing for growth.”
- Sam Richardson, Deputy Editor at Which?:
“If done correctly, it can help people beat inflation and grow wealth in real terms.”
However, he warned that care must be taken to avoid inappropriate recommendations that could discourage first-time investors.
Consumer Protections in Place
The FCA has banned commission payments for such support, which helps ensure recommendations aren’t biased by sales incentives. Firms must also demonstrate they are acting in the consumer’s best interest.
Wider Government Strategy
This move aligns with wider government goals to promote investing over cash savings. As part of this push, the Treasury will cut the ISA allowance for under-65s from £20,000 to £12,000 starting April 2027 — incentivising longer-term investments over cash hoarding.
Additionally, the FCA has launched a “firm checker” tool to protect consumers from investment scams, further supporting safe and informed investment activity.
Final Thoughts for Investors
This shift is particularly important at a time of high inflation, when holding money in low-interest savings accounts could lead to its value being eroded.
With interest in retail investing growing in the UK — especially among younger adults and first-time investors — these FCA reforms could play a key role in transforming how people engage with their money.
If the rollout is successful, we could see a cultural shift towards more active investing, bringing the UK in line with US and EU investment behaviours.
Sources: (BBC.co.uk)
