FCA targets close advice gap as women show lower trust in financial firms

The Financial Conduct Authority announced last week that new targeted support rules will take effect in April 2026, allowing financial firms to provide generic financial recommendations to customers based on how people in similar situations manage their money. The move is designed to narrow what regulators call the advice gap and reduce the cost barrier that can keep people from seeking professional guidance. Data shared exclusively with This is Money by The Investing and Saving Alliance shows a persistent gender trust gap: only 43% of women say guidance from their financial services providers is in their best interests, compared with 56% of men.

Targeted support will allow firms to tailor recommendations to consumers based on what people in similar situations do with their money. In practice, that could include suggesting that someone who holds “too much” cash should consider investing, among other guidance. Regulators say the approach aims to reach disengaged savers who do not currently seek advice because of cost, time, or mistrust, and to help foster a more inclusive retail investing culture.

Beyond the gender gap, the data show a broader hesitancy around relying on digital tools for personal finance. Only 27% of women feel confident using AI search engines such as ChatGPT or Copilot to help with their finances, compared with 43% of men — and, as some analysts warn, the advice such tools provide may not always be correct. Carol Knight, chief executive of The Investing and Saving Alliance, framed the divide as part of a wider shift in how people manage money. “Clearly, there is a growing split in how people deal with their money. Many – especially women – may be unsure where to turn for support and mistrustful of the industry, while others, more often men, are already leaning on AI tools that freely admit they can be wrong. That isn’t something a single new rule or product can fix.”

The divergence between genders is mirrored in investment behavior. King’s College London figures show men hold about £567 billion more invested in the UK than women, and men are roughly twice as likely to have a stocks and shares ISA. In The Investing and Saving Alliance’s survey, almost a third of respondents (28%) described their view of guidance from financial firms as ambivalent, while 10% were uncertain and 13% said they did not trust their providers. Knight said targeted support will be crucial to reaching disengaged consumers who no longer trust the system, and to building the retail investing culture the government aims to foster. “TISA strongly supports this ambition to make growth more inclusive and improve consumers’ financial wellbeing. However, it needs to sit alongside simpler, decision-useful disclosures, clearer risk warnings, and more inclusive marketing that normalises money conversations so people can get the help they need from credible, stable and trustworthy providers.”

Sophie Legrand-Green, head of policy at TISA, warned that regulatory and privacy rules could hinder the reach of targeted support. “We are hurtling towards a major roadblock to targeted support’s success. Under PECR, financial services firms will be limited in their communications and potentially only able to offer targeted support to one in four customers. If we are to reach those who are most disengaged, we need urgently fix this, or we risk millions of consumers being left languishing in the advice gap. This is beyond the scope of firms or the regulators, and we need Government intervention to unlock the full potential of targeted support.”

The Financial Conduct Authority and industry groups describe targeted support as a bridge between no advice and paid, individualized financial planning. Advocates say it could lower barriers for people who want to improve their financial wellbeing but are deterred by cost or complexity. Critics caution that generic recommendations must be carefully designed to avoid steering consumers into unsuitable products or creating misleading impressions about personalization. Regulators emphasize that the framework will require ongoing monitoring to ensure that guidance remains appropriate and that disclosures remain clear enough to help consumers judge risk, fees, and potential conflicts of interest.

As the rules come into effect next spring, policymakers and industry executives are weighing how best to implement targeted support without compromising consumer protections or privacy. The debate centers on striking the right balance between scalable, accessible guidance and ensuring that advice remains appropriate, well-warned, and aligned with individual circumstances. In the meantime, the trust gap highlighted by the survey underscores the challenge facing efforts to broaden participation in personal finance and invest more broadly across gender and socioeconomic groups.