Summary 5

1 UK retail investment 7

1.1 How individuals save and invest 7

Active and passive management 8

1.2 Barriers to investing in non-cash assets 9

1.3 Outcomes of low retail investment 10

Poor returns 10

Poor investment decisions and scams 11

Lower investment into UK companies 11

1.4 How UK retail investment compares internationally 12

Reasons for low retail investment 14

2 Financial advice 15

2.1 What is financial advice and guidance? 15

2.2 Financial advice and guidance use and the "advice gap" 18

Who takes financial advice? 18

2.3 What are the barriers to accessing financial advice? 19

Cost and consumer need 19

Regulatory risk 20

Financial education 20

2.4 Impact of a lack of financial advice 21

Poorer outcomes 21

Inadequate pensions 21

Risk of investment scams 22

3 Policy development 24

3.1 Policy background 24

3.2 The Advice Guidance Boundary Review 25

3.3 Targeted support as a new regulated service 26

How targeted support differs from financial advice 26

Requirements for firms offering targeted support 27

Excluded from targeted support 28

3.4 Targeted support examples 28

Example: Making a first investment 28

Example: Increasing pension contributions 29

3.5 Industry responses and practical challenges 29

Risks 30

Data protection and direct marketing 30

3.6 Simplified advice 31

4 Implementation of targeted support 33

4.1 Legislation and regulation 33

Legislative framework 33

FCA rules 33

Becoming authorised to provide targeted support 34

4.2 Consumer complaints 34

4.3 Timeline 36

5 Other efforts to improve retail investment and financial planning 37

5.1 UK-wide retail investment campaign 37

5.2 Changes to ISA rules 37

5.3 Pension and retirement measures 38

Guided retirement 38

Value for money 38

Pension dashboards 39

5.4 Consumer Composite Investments: new communication requirements

about investment products 39

5.5 Expanding consumer access to investments 40