In 2013, the regulator brought in rules to restrict how firms give advice to consumers. This has led to a gap in support, where firms provide "guidance", which is defined as generic factual information, or "advice", which is defined as a personal recommendation based on a full assessment of an individual’s circumstances and financial position. 

In a Financial Lives Survey, conducted in 2022, only eight per cent of UK adults reported taking financial advice over the previous year. Findings such as this provided the impetus for the launch of Advice Guidance Boundary Review (AGBR). 

Subsequently announced in the latter months of 2022, the broad aim of the AGBR is aiming to solve for this gap in support to make sure that consumers can access the guidance and support that they need, when they need it, at a cost they can afford, to help make informed financial decisions.

Speaking about the review, Sarah Pritchard Executive Director, Supervision Policy and Competition & International at the FCA, called it “…a once-in-a generation opportunity to undertake a review of our rules, making sure they match our market and our risk appetite.”

As part of the review, in December 2023, the FCA and Government jointly published a paper, which set out three proposals aimed at helping consumers get the support and help they need with decisions on their pensions and investments.

The proposal taken forward for the next stage is known as ‘Targeted Support’, and it is this which is being put to the test in a working environment. That is the role of the AGBR sprints.

The aim of Targeted Support is to provide a solution that sits precisely in the space between ‘information and guidance’ and ‘holistic advice’, the advice gap named by a variety of reports as the key gap to plug for everyday consumers.

The way this is defined is that ‘information and guidance’ is general details, but crucially without giving a personal recommendation, while ‘holistic advice’ does contain a personal recommendation that factors in a consumer's overall financial circumstances and objectives.

If approved, Targeted Support will enable firms that have been authorised by the FCA to provide suggestions to new or existing consumers on what might be in their interests in relation to specific pensions or investment products.

As part of the proposal, the Targeted Support should be more direct, with recommendations of suggested courses of action allowed to be included. Consumers should be able to receive ready-made solutions for pensions and investments, which are based on groups of consumers with common characteristics. It should also allow providers to outline scenarios with better outcomes than if they did not follow the suggestion

Before the review is concluded, Targeted Support now needs to be put to the test in a live, but controlled environment. And that is the role of the sprints. 

Sprints are common practice in many industries, but particularly among software and design practitioners. Generally, they refer to a short, time-boxed period when a team is assembled to complete a set amount of work. Sprints are a routine part of the FCA’s working pattern, where they bring together participants from across and outside of financial services to address industry challenges.

The AGBR sprints are slightly different. It is the first time the FCA are leaning on insights coming from industry stakeholders as well as regulators, with the ultimate aim of developing a policy framework which is data driven and effective.

Each firm taking part in the sprints has been asked to build a proposal, test it with consumers in a lab setting and then showcase their findings. Two central questions are at the heart of the sprints. 

1. How do firms build a viable Targeted Support Journey?
2. How do consumers react to a Targeted Support Journey?

Barclays is approaching the process by holding a series of one-on-one interviews with participants who we believe stand to benefit most from Targeted Support. Each participant meets the following criteria:

1. They hold more than £5,000 in cash ​and a suitable emergency fund
2. They do not currently invest​, but are open to investing
3. They do not anticipate withdrawing funds within next three years
4. They have no high interest or pay day loan debts 
5. They are not classed as vulnerable

Each interview will then explore the investment journey, with motivation, confidence building, differing help and guidance in terms of how to choose and how to manage investments all included in the process.

Participants will be asked to react to more traditional stimulus, such as sample webpages, as well as less traditional stimulus, including graphics and artistic drawings.

Following the completion of the interviews, findings will be written up and presented, with each participating firm showcasing their findings.

The full Advice Guidance Boundary Review will then be published with recommendations made for how regulations might change to build a stronger retail investing market.