Call for savers to get cheaper advice on investing

Millions of savers may soon have access to low-cost financial advice, enabling them to invest their nest eggs for the first time.

The city watchdog, the Financial Conduct Authority (FCA), is proposing new rules that will allow more banks, mortgage banks and advisers to provide affordable advice to people who want to invest in an Individual Savings Account (ISA).

Nearly ten million people have more than £10,000, largely in cash, the value of which is being eroded by rampant inflation. Nearly half of these would be willing to invest some of their money in the hope of a higher return, but many lack the confidence to do it themselves and cannot afford the necessary advice.

The FCA hopes to address this by making simple advice cheaper to access. If the plans go ahead, they will be implemented in April 2024.

Savers who can put up to £20,000 in an Isa can get some form of streamlined advice under the new rules.

Costs would be kept low by limiting the number of investments offered, lowering the required level of qualification of advisers, allowing depositors to pay for advice in installments and allowing professionals to provide advice without first discussing all aspects of an investor’s finances. examine the saver.

The FCA admits there is a risk that people with complex finances will use the new simplified service instead of getting the full advice they need.

Tom Selby, head of pension policy at investment platform AJ Bell, warns advisers may be reluctant to give this cheaper advice. He says: ‘If something goes wrong, it’s the firm that gives the advice.’