The FCA Wants To Reduce The Cost Of Financial Advice In The United Kingdom

According to the FCA statement, more than 4 million individuals in the UK have surplus cash of more than £10,000 that they would want to invest. However, most people are unsure where to invest their money, and getting personal financial advice on the island is very pricey.

Holding cash causes 'financial position harm' in an inflationary environment. The increased cost of financial advice is attributable to the local market's extensive regulation, but the FCA views this as an opportunity to assist mass consumers with their more uncomplicated investing requirements.

“People in the UK should have access to useful and cheap financial goods and services that help enhance their quality of life while also supporting the economy now more than ever. These suggestions are part of our efforts to create a consumer investment market in which consumers can easily get assistance and companies are not discouraged from giving it ” The FCA's Executive Director of Markets, Sarah Pritchard, stated.

As a result, the agency is conducting public consultations on four suggested amendments. It wants to restrict the scope of investment under the new framework in order to make advice more understandable and deliverable. Furthermore, the new regime's certification criteria for assistance would be reduced, lowering the total cost for consulting firms.

Furthermore, the FCA wants to allow customers to pay advice costs in installments and to improve the 'fact discover' procedure. It is intended to make the whole advice process easier for consumers and businesses.

Consumer Protection Initiatives

The public consultation on financial advice is another move taken by the FCA to better protect consumers and retail traders in the UK amid a time of high inflation when individuals are searching for new methods to preserve their cash.

The FCA said three weeks ago that it intervened 4,151 times between July and September 2022 to adjust or remove rogue financial promotions. The contract for difference (CFD) sector was the most often breached. The platforms enticed customers with incentives that might obscure the hazardous nature of the investments they were making.

Last week, the regulatory watchdog issued another warning, this time concentrating on the trading industry's excessive gamification, which may act against traders' best interests. Trading app design and excessive push alerts, like the incentives outlined above, might lead to FOMO (fear of missing out) and overtrading.

Stay tuned for more Forex Regulatory news.

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