By clarifying the regulatory framework the FCA hopes to encourage more firms to offer broader financial guidance, which can help individuals who may not need or be able to afford full financial advice.
Guidance will never be as effective as full financial advice because, by its nature, it can only provide general information rather than personalised recommendations tailored to an individual's unique circumstances.
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Better guidance alone is unlikely to move those with a low-risk cash savings mentality into more growth-oriented investments.
Joshua Croft is a senior technical consultant at AJ Bell
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