The Financial Conduct Authority is launching a new set of measures to build a stronger investment culture in the UK, supporting firms to innovate and make investing more engaging for consumers.

The measures aim to empower retail investment, reinforce wholesale markets, and maintain the UK’s position as a world-leading financial centre.

The FCA is seeking view to ensure regulation supports consumers to invest with confidence.

Proposals to enhance how firms classify their clients will give confidence to firms when they deal with professional investors, drawing a line so wholesale markets can remain agile and innovative.

The regulator has worked closely with industry and consumer groups in an effort to deliver practical policy that moves the dial on risk.

“Today’s measures support investment risk culture right along the spectrum,” Simon Walls, executive director of markets at the FCA said.

“They ensure that firms can compete to give retail customers material that informs and engages them. They also draw a brighter line for professional markets, defined by contracting parties, informed consent and regulation that is proportionate to that.”

Under the measures, the FCA will make a decisive shift away from prescriptive and complex templates that consumers don’t find useful. This gives firms more freedom to put the consumer first, innovate, and help their customers understand potential returns as well as costs and risks.

The FCA is also seeking views on how longer-term regulation can keep up with the evolving retail investment landscape and help shift the dial on risk appetite, to give consumers confidence to access investments that meet their needs and benefit from the potential returns.

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As part of the measures, the FCA is setting a clearer boundary between retail and professional investors, allowing firms to deal with professional investors with confidence operating outside retail regulations. This will free up firms to innovate and offer a more diverse range of products to truly experienced clients with the resources to bear more of the risks.

The threshold to qualify as a professional investor will remain high, so only those with experience, advice, or the ability to bear risk are taken out of retail protections, such as the Consumer Duty, that they don’t need. High standards in classification mean that wholesale regulation remains proportionate and firms are freed from unnecessary guardrails.

Proposals remove some arbitrary tests and give firms more responsibility to get it right. This includes a new way for wealthy and experienced individuals to opt out of retail protections and streamline how firms assess professional investors.