Search the internet for “proposal fails” and you’re met with a host of unfortunate videos. Couples being knocked down by unexpected waves or outshone by their gastrically challenged pooches (pun most certainly intended). Soon to be added to this list are reactions to the FCA’s latest proposal for “targeted support”, to help individuals get better returns on their money, which has been, to put it lightly, a bit of a flop.
In one of the biggest shifts to regulated financial advice in a decade, the Financial Conduct Authority (FCA) is proposing to allow authorised firms to give generic investment suggestions, without the regulatory burdens of personalised advice. While the financial advisory community hasn’t outright rejected the proposal (unlike one disgruntled girlfriend at a minor league baseball game), it hasn’t exactly embraced it with open arms either.
Good sentiment
The proposal, like most, is well-intended. A recent survey found that over half of UK savers want more support on how to invest. The regulator’s plan is to let firms provide fast, general guidance, such as nudging those hoarding cash to consider putting some of it into stocks. The FCA estimates that around 7 million adults have over £10,000 in cash savings and no investments, and that between 13.5 and 30.6 million people could benefit from such support.
The new “targeted support” model is expected to launch in April 2026. The FCA believes up to 100 firms will offer such services, many free of charge and potentially cross-subsidised by other product offerings. And while this sounds promising, it also raises red flags.
Trouble in paradise
As James Daley, head of consumer group Fairer Finance, told the Financial Times, the changes are “the right direction of travel – but they must be implemented with adequate safety rails to protect consumers.” He warned that these new support channels must not become gateways to exploitation.
A key problem with the FCA’s proposal, is that many consumers just aren’t ready to be “nudged” toward investment products, no matter how well-meaning the support. What’s missing isn’t just advice, it’s understanding. Too many people don’t know how investments work, what risk means in real terms, or even the basics of compound growth. Before we send savers down the path toward investing (potentially into the hands of advisers whose fees, while initially modest, can quickly balloon) we need to equip them with foundational knowledge.
An alternative path
At MicroFact, we recognise the most logical starting point to financial education is pensions. Almost everyone will engage with a pension at some point in their life, and pensions offer a built-in gateway to understanding investing, including risk, returns, compounding, and long-term planning.
Today, far too few people realise how their pension works, what it’s invested in, or what options they have. That’s what makes our educational app a crucial opportunity for businesses to build confidence and competence at scale.
Ultimately, if the FCA truly wants to empower consumers, the first step isn’t nudging them toward products, it’s equipping them with the tools to make informed decisions in the first place.
Before we pop the question and ask people to say “yes” to investing, let’s make sure they understand what they’re committing to in the first place and give them a date with targeted education first.
Could your team benefit from targeted financial education?
Get in touch with us at contact@microfact.co.uk to explore how our financial engagement tools can support long-term employee wellbeing.
