News & Views

The Financial Conduct Authority’s new framework for targeted support in pensions and retail investments represents an important step in addressing what I think is one of the most persistent challenges in our financial system - how we help more people make informed decisions about their financial futures.

The Financial Conduct Authority’s new framework for targeted support in pensions and retail investments represents an important step in addressing what I think is one of the most persistent challenges in our financial system - how we help more people make informed decisions about their financial futures.

For too long, there has been a gap between meaningful financial advice, which can be prohibitively expensive for people with modest sums to invest, and general guidance, which may not give people the confidence they need to act. The result is that many people are left to navigate important financial decisions alone, often choosing to do nothing rather than risk making the wrong choice.

I believe we have an opportunity, and a responsibility to change that, but to do so, we need to think beyond the provision of financial advice and consider how we can help people develop the confidence, understanding and habits that allow them to build wealth over time.

A more accessible route into investing

In December 2025, the FCA published its policy statement on targeted support, confirming its final rules in February 2026. The new regime, which came into effect on 6th April 2026, allows authorised firms to provide suggestions designed for groups of consumers who share common characteristics and financial circumstances.

The regulator estimates that around 23 million consumers are currently underserved by the markets for financial advice and guidance. Targeted support is intended to bridge that gap by providing more relevant, actionable help without requiring every individual to receive a full, personalised financial advice service.

Crucially, it is not about removing the value of professional advice, nor should targeted support be confused with a comprehensive assessment of an individual's circumstances. Instead, it offers a potential middle ground in the form of support that is more accessible than traditional advice and more useful than information alone.

The economics of financial planning have long presented a challenge. Advisers must meet substantial regulatory and compliance obligations, alongside professional indemnity insurance, levies and other operating costs. These are important elements of a system designed to protect consumers, but they also mean that providing advice to someone with a relatively small investment pot can be uneconomic.

It is problematic to have a system in which the ability to make informed financial decisions is effectively determined by the amount of money someone already has - targeted support offers one way to rethink that model. Its success, however, will depend on firms developing services that people understand, trust and are willing to use. Regulatory reform can create the opportunity, but it cannot, by itself, create a nation of confident investors.

The money that never gets invested

One of the challenges we face is that people can be diligent savers without ever becoming investors.

Cash plays an important role in financial planning - accessible savings can provide security, cover unexpected expenses and help people prepare for short-term commitments. It would be wrong to suggest that everyone should invest their savings, regardless of their circumstances.

However, for people who have established an appropriate emergency reserve, have manageable financial commitments and are saving towards longer-term goals, holding all their surplus money in cash may mean missing opportunities for growth.

Investing in the stock market involves some degree of risk, and returns are never guaranteed. The value of investments can fall as well as rise, sometimes significantly. Yet over a sufficiently long period, investing can provide an opportunity to participate in the growth of businesses and the wider economy in a way that cash savings alone may not.

The problem is that many people do not have the access to information to weigh up those choices. If it’s not something you’ve been raised with or educated in, the idea of investing can seem complicated, intimidating or something reserved for people who are already wealthy.

Research published by the Investment Association in December 2025, drawing on the FCA's Financial Lives survey, found that 54% of non-advised adults with significant cash savings and no investments outside their pensions had not considered investing. Among the reasons cited were concerns about losing money and a lack of knowledge or access to support.

That is a notable barrier to overcome, suggesting that the challenge is not simply persuading people to invest, but helping them understand what investing is, how it works and whether it is appropriate for their own circumstances. The Investment Association's Retail Investment Campaign is a welcome development in this respect, as by raising awareness of investing's contribution to individual financial wellbeing and the wider economy, it seeks to encourage more people to consider taking that next step.

The opportunity is to make investing a more ordinary part of financial life; something people can learn about, ask questions about and approach thoughtfully, rather than a subject they feel they must master before they can begin.

Start with the life people want to lead

I also think that financial services can sometimes become so focused on products, markets and technical terminology that we lose sight of the reason people save and invest in the first place.

Most people are not trying to outperform a market benchmark or build an impressive portfolio. They are trying to achieve something meaningful in their lives, whether it be a family holiday, a new car, a better kitchen, a deposit on a home, the opportunity to support their children, or the prospect of a comfortable retirement. These are wonderful ambitions, often built through years of work, careful budgeting and modest, regular contributions.

Those of us working in finance should always start our conversations about investing with those ambitions in mind, rather than with financial products alone. What does someone want their money to help them achieve? When will they need it? How much uncertainty can they reasonably accept? What can they afford to set aside, and what support would help them make a decision?

These questions make financial planning relevant to people's lives, and they should drive the attitudes of financial institutions in the City of London - this is the role in which we serve the nation and the people within it.

The City has an opportunity to play a meaningful role here. Its contribution should not be confined to managing the wealth of those who already have substantial assets - it should also include helping people with more modest means understand how financial markets work, how to assess their options and how to participate responsibly when it is appropriate for them to do so.

That is not simply a question of commercial opportunity; it is a question of financial inclusion and the role our financial services industry can play in helping individuals build greater independence.

Confidence comes from learning by doing

Education is essential, but we should be careful not to make the process of learning about investing so daunting that people never get beyond the proverbial classroom. There is a difference between understanding a concept in theory and gaining the confidence that comes from experience. With appropriate safeguards, people can learn a great deal by taking small, manageable steps, observing what happens and asking questions along the way.

That does not mean encouraging people to speculate, chase fashionable stocks or treat the stock market as a game. Nor does it mean that everyone should experiment with money they cannot afford to lose. Instead, it means making it possible to learn about the principles of investing and, where suitable, gain practical experience without feeling that a single decision must determine their financial future.

For some, that might begin with understanding the difference between saving and investing, exploring how diversified funds work or learning about the risks involved before committing any money. For others, it may mean beginning with a modest sum, perhaps £10 or £100, that fits within their financial circumstances.

The amount is less important than the habit of engaging with the subject, provided the costs and risks are understood. Small beginnings will not remove investment risk, and even modest losses can matter to someone on a tight budget. However, nor should people be made to feel that investing is beyond their reach simply because they do not have thousands of pounds to spare.

We should also recognise the limits of education alone. Information is valuable, but it is not a substitute for appropriate support. People need accessible explanations, clear communication and reliable ways to distinguish useful guidance from speculation, misleading promotions and promises of easy returns.

The aim should be to build financial capability with the confidence to ask questions, understand the trade-offs and make considered decisions, rather than a reliance on someone else to make every decision on their behalf.

Patient capital in an impatient world

I think it’s also important to note that we live in a culture that places considerable emphasis on immediacy. Social media can make success appear instantaneous, while the lottery and other promises of sudden wealth appeal to the hope that a single event might transform our circumstances.

Against that backdrop, the idea of building wealth gradually can seem uninspiring - Warren Buffett famously described his investment philosophy as a "get-rich-slowly scheme". Yet for many people, patient capital is a far more realistic route towards long-term financial security than the pursuit of an overnight breakthrough.

The principle is straightforward: start early, contribute regularly and give money time to grow. Compounding is an important part of this process, and over long periods, its effect can become significant.

Naturally, the value of beginning early is that it gives the process more time to work. Someone who can invest a modest amount regularly over several decades has more time to benefit from potential growth than someone who waits until much later in life. This is not a promise that investing will make everyone wealthy, but it is a recognition that building financial resilience is usually a gradual process, shaped by consistent decisions rather than dramatic gestures.

We should celebrate that process more - saving for a holiday, putting money aside for a future home improvement or gradually building a retirement fund are meaningful achievements. They deserve to be treated as such, even when the sums involved initially seem small.

We should also recognise that not everyone has money left over to invest. Rising living costs, insecure incomes and competing financial responsibilities are real constraints, and no amount of encouragement can overcome them on its own. The first step for many people will be to establish a financial buffer or address expensive debt.

Nonetheless, where people do have the capacity to save for the longer term, we should help them understand the choices available and the potential benefits of putting some of that money to work.

A responsibility shared by the City and society

The FCA's targeted support framework gives financial services a new opportunity to reach people who have historically been underserved. The Investment Association's campaign provides a complementary effort to make investing more familiar and accessible. Both are welcome, but the real test will be whether they translate into better experiences and better-informed decisions for ordinary people.

Financial services firms need to design support around people's needs, communicate in language they understand and make the risks as clear as the potential rewards. Regulators must maintain appropriate consumer protections while enabling firms to develop services that are proportionate and economically viable. Meanwhile, governments, educators and employers also have a role in helping people build the knowledge and confidence to manage their money.

Above all, we need to move away from the assumption that investing is something people do only once they have accumulated substantial wealth. For many, it is precisely the gradual accumulation of capital that can help them reach that point.

I have long believed that the City of London should be a place of opportunity not only for those who work within it, but also for those who want to participate in the prosperity it helps create. That means widening access to knowledge and support, making the first steps into investing less intimidating and recognising the legitimate ambitions that motivate people to save in the first place.

The objective is not to persuade everybody to invest, irrespective of their circumstances. It is to ensure that those who could benefit from investing are not prevented from considering it by a lack of accessible support, confidence or understanding.

If we can combine sensible regulation with practical education and affordable, relevant support, we can help more people move from simply holding money to making informed choices about their financial futures.

The greatest success may not be the number of people who make a large investment tomorrow. It may be the number who begin modestly, keep learning, invest regularly when appropriate and give themselves the time to build something meaningful. That’s how financial independence is developed - not overnight, but one considered decision at a time.