Navigating Personal Finances Receives a New Direction, Aiming to Assist Millions
The Financial Conduct Authority (FCA) has unveiled a series of reforms aimed at creating a thriving and trusted market for financial advice, targeting individuals who require guidance, simplified advice, targeted support, and full financial advice. These reforms are part of the FCA's broader strategy to deepen trust, rebalance risk, support growth, and improve lives, which could particularly benefit millennials.
Detailed consumer testing has been completed, and the results have been published alongside the consultation. The testing reveals that around 8% of those who did not receive financial advice express a need for more support before investing, highlighting the importance of these reforms.
One of the key proposals is the introduction of a new type of help called 'targeted support.' This service will be offered to groups of consumers with common characteristics, such as those who may be drawing down on their pension unsustainably, not saving enough for retirement, or who have excess cash sitting in a current account. The aim is to help consumers navigate their financial lives and plan for the long term, indirectly benefiting millennials as well.
The FCA's reforms also aim to address the 'advice gap' by providing consumers with access to a choice of guidance, targeted support, simplified advice, and full financial advice. This could help reduce the number of individuals who feel overwhelmed by the number of investment options available, as approximately 12% of those who did not receive financial advice admit to feeling this way.
The FCA's proposals have inbuilt protections for consumers and are intended to set the framework for the next 20-30 years. The reforms are expected to support growth by enabling increased investment and innovation. The FCA is working closely with the government to help resolve issues that might prevent firms from communicating with consumers.
The Pension Schemes Bill, aimed at improving pension investment outcomes, could indirectly benefit millennials by improving the overall pension landscape. Additionally, the growing trend among younger generations to use social media for financial advice underscores the need for better education and engagement from financial institutions. This trend suggests that any reforms should consider accessible and digitally savvy platforms for financial advice.
These reforms are among almost 50 initiatives the FCA set out in a letter to the Prime Minister in January 2025, which the FCA is delivering against this year. The FCA ran a 6-week policy sprint to carry out its work, involving firms, consumer representatives, and other regulatory members in designing consumer journeys and rules for the consultation. The aim of the policy sprint and consumer testing was to accelerate the consultation period, which is now open for 8 weeks.
Sarah Pritchard, Deputy Chief Executive of the FCA, stated that the reforms are designed to help consumers navigate their financial lives and plan for the long term. She added, "Our proposals will help people navigate their financial lives and give them greater confidence to invest." The FCA's latest Financial Lives survey (FLS 2024) reveals that only 9% of adults received financial advice about their pensions or investments in the previous 12 months. These reforms are a significant step towards bridging this advice gap and providing a more supportive financial environment for all consumers, including millennials.
[1] Source: FCA Press Release, "FCA sets out proposals to improve financial advice for millions of consumers," 2025. [2] Source: FCA Policy Statement, "Targeted advice: consultation," 2025. [3] Source: HM Government, "Pension Schemes Bill," 2024. [4] Source: FCA Research Paper, "Financial Lives Survey 2024," 2024. [5] Source: FCA Policy Statement, "Our strategy for the next 20-30 years," 2025.
According to the FCA's Policy Statement, "Targeted advice: consultation" (2025), the Financial Conduct Authority (FCA) is introducing a new service called 'targeted support' to help consumers manage their financial lives, particularly those who may be drawing down on their pensions unsustainably, not saving enough for retirement, or have excess cash sitting in a current account. This initiative could indirectly benefit millennials as well.
Additionally, the FCA's latest Financial Lives survey (FLS 2024) revealed that only 9% of adults received financial advice about their pensions or investments in the previous 12 months. The FCA's reforms, as outlined in their press release, "FCA sets out proposals to improve financial advice for millions of consumers" (2025), aim to bridge this advice gap and provide a more supportive financial environment for all consumers, including millennials. This information can be found on ffnews.com under topics like finance, investing, business, and personal-finance.
