The challenge of eliminating – or at the very least narrowing – the advice gap has brought countless proposals from advisers, regulators and governments over the years. On the whole, sadly, little has changed. Elliot Daniels, Head of Compliance at Truly Independent, shares his insights.
The Financial Conduct Authority’s targeted support initiative is the latest would-be solution. With only a handful of firms committing to it so far, though, we may not have a long-awaited game-changer on our hands just yet.
Talk of the gap can sometimes feel like criticism of the industry itself, with the blame for its existence placed squarely on the shoulders of those who give advice. On the face of it, it seems nonsensical to imply that someone who has dedicated a career to givingadvice would want to create barriers to individuals receiving it – yet firms cannot claim to be entirely blameless.
The ban on commission encouraged firms to move clients to new ongoing review services – only for the MiFID II hammer to drop, with the European Union mandating that all those clients should be reviewed annually.
Meanwhile, the compliance burden of providing regulated advice has continued to grow. More often than not, this has been a result of compliance teams either acting out of fear of what might be scrutinised next or simply failing to grasp what is actually expected of them.
Perhaps aware of this issue, the FCA recently proposed streamlining and consolidating regulation across pensions and investments[1]. This would obviously represent a welcome development, but – as targeted support has shown – the chances are that firms will hang back from embracing change, afraid of being among the first to stick their heads above the parapet.
Curiously, plenty of research suggests the adviser community is broadly committed to the idea of advice for everyone. For example, only 13% of firms surveyed for a Lang Cat report last year claimed to have a minimum asset requirement for clients – and just 6% said they would turn away anyone falling short of such a threshold[2].
Yet it is hard to believe such figures capture the full picture. It may be relatively easy to preach the ‘advice for everyone’ gospel, but it is significantly harder to put it into practice – and the culprit is workload.
Every new client for the average firm becomes an ongoing client, and every ongoing client needs an annual review. A new stocks-and-shares ISA is reasonably simple to recommend and implement, but £20,000 charged at 0.75% p.a. is £150.
The harsh reality is that filling a car with petrol could cost £150 in the current geopolitical and geoeconomic climate. In addition, we ought to factor in the time and administration involved in delivering a compliant review service that does nothing to attract the scrutiny of either the FCA or the Financial Ombudsman Service.
Against this backdrop, advisers’ individual decisions regarding which potential clients to engage with are unlikely to be rooted in greed. They are far more likely to be rooted in necessity.
Specifically, they are likely to be rooted in the necessity of prioritising higher-net-worth leads over lower ones. I wonder if this is reflected in the aforementioned statistics.
Within the FCA’s proposals, of course, is an invitation for input on removing the need for annual suitability assessments. It would be naïve, though, to assume this signals a return to the ‘good old days’.
The FCA has already made very clear that ongoing services should continue to offer fair value. Reading between the lines, firms that have dug their heels in since the emergence of Consumer Duty, declaring that a one-size-fits-all 1% p.a. ongoing adviser fee for an annual service is justified, cannot now expect to reduce their service levels without proportionately reducing their charges as well.
In my view, ultimately, it is vital to acknowledge financial advice for everyone does not mean ongoing advice for everyone. This is hardly a revolutionary notion, but I feel it bears repeating.
At Truly Independent, for instance, our client segmentation does not consider only the products and investments likely to be appropriate. It also considers the service that a client is most likely to benefit from.
To that end, ‘transactional’ is not a dirty word. It merely means that the onus is on the client to approach us if further advice is needed.
For those clients who want ongoing support but not advice, we offer systems access and client care but without the commitment from either side to regular reviews. For those who do want a review, we consider whether they would prefer a cost-efficient virtual service or a face-to-face meeting, with the further option of an interim call mid-year.
Is there a lesson in all this? I believe so. For me, it is that firms that are brave enough to innovate and astute enough to see past compliance ‘fear’ should recognise that many of the tools capable of tackling the advice gap, far from remaining ever-elusive, are already available.
Elliot Daniels is Head of Compliance at Truly Independent.
[1] See, for example, Financial Conduct Authority: Simplifying the Pensions & Investment Advice Rules, March 2026 – https://www.fca.org.uk/publication/consultation/cp26-10.pdf.
[2] See, for example, Lang Cat: The Advice Gap 2025, June 2025 – https://www.theadvicegap.co.uk/wp-content/uploads/2025/06/Advice-Gap-2025.pdf.
