Financial advice vs guidance: what's the difference and which do you need?

Financial guidance is free and general, it helps you understand your options but won't tell you what to do.

Financial advice is personalised, regulated, and comes with a specific recommendation, usually for a fee.

Since April 2026, a new middle option called Targeted Support has also launched, aimed at closing the gap between the two.

Knowing which one you're getting, and which one you actually need matters. Get it wrong, and you could end up making a big financial decision with less protection than you think, or paying for a service you didn't need in the first place.

Here's how to tell the difference, and how to work out which is right for your situation.

What is financial guidance?

Financial guidance gives you general information to help you understand your options, without telling you which option to choose. It's typically free and available to anyone, and the person or organisation providing it won't recommend a specific product or course of action.

You can get financial guidance from:

• MoneyHelper, a free, government-backed service covering money and pensions

• Pension Wise, free pension guidance for over-50s, run by MoneyHelper

• Your own pension or investment provider, many of which offer guidance calls or online tools

• Citizens Advice, which offers free, independent guidance on money, debt and benefits

The key limitation is that guidance isn't tailored to you.

It might explain the pros and cons of an ISA versus a pension, for example, but it won't tell you which one is right for your personal circumstances, and because it's not a personal recommendation, you generally have no recourse if things don't work out as hoped.

What is financial advice?

Financial advice is a personalised, regulated service where a qualified financial adviser reviews your individual circumstances and gives you a specific recommendation.

Unlike guidance, advice is designed around your goals, your risk tolerance and your financial situation, and you're protected if the advice turns out to be unsuitable.

In the UK, financial advisers must be authorised by the Financial Conduct Authority (FCA). This authorisation brings two important protections:

• If an adviser gives you unsuitable advice, you can complain to the Financial Ombudsman Service

• If the advice firm goes out of business, you may be covered by the Financial Services Compensation Scheme (FSCS)

There are two main types of financial adviser:

• Independent financial advisers (IFAs): Assess products and providers from across the whole market to find what's right for you

• Restricted advisers: Only recommend products from a limited range of providers, or specialise in a particular area such as pensions or mortgages

Advice isn't free. Depending on the adviser and the complexity of your needs, you might pay a fixed fee, an hourly rate, or a percentage of the assets they're advising on.

Financial advice vs guidance vs Targeted Support: what are the key differences?

What is Targeted Support, and how does it change things?

Targeted Support is a new form of regulated help that launched on 6 April 2026, sitting between guidance and full financial advice.

It allows authorised firms, such as pension providers, investment platforms and banks, to give consumers ready-made suggestions based on shared characteristics with other people in a similar situation, rather than a fully personalised recommendation.

The change was introduced as part of the FCA and Treasury's joint Advice Guidance Boundary Review, which the FCA has described as one of the biggest reforms to the advice and guidance landscape in more than a decade.

It's designed to tackle the "advice gap": the FCA estimates that around 23 million UK consumers are currently underserved when it comes to financial advice and guidance, including millions who hold meaningful savings but get no help at all in managing them.

In practice, Targeted Support might look like:

• A pension provider suggesting you review your withdrawal rate if you're drawing down your pension faster than is sustainable

• An investment platform flagging that you're holding a large cash balance that could be working harder in a Stocks and Shares ISA

• A bank grouping customers with similar circumstances and suggesting a next step that's worked well for that group

It's important to understand what Targeted Support doesn't cover. It's currently limited to pensions and retail investments, it doesn't apply to mortgages, protection insurance, or safeguarded pension benefits such as guaranteed annuity rates, which still require full advice.

It's also brand new: many firms are still applying to the FCA for permission to offer it, so you may not see it from your own provider straight away.

Which do you need: guidance, Targeted Support, or advice?

The right option depends on how complex your situation is and how much reassurance you want before acting.

Guidance is likely enough if:

• You want to understand your options in general terms

• You're comfortable making the final decision yourself

• Your situation is fairly straightforward

Targeted Support may help if:

• Your provider identifies you as being in a common situation (for example, holding excess cash, or drawing down a pension unsustainably)

• You want a nudge in the right direction without paying for full advice

• Your needs relate specifically to a pension or investment

Financial advice is worth considering if:

• You have a complex situation, multiple pensions, a business, a blended family, or a defined benefit pension transfer

• You want a recommendation tailored specifically to you, with formal protection if it's unsuitable

• You're making a decision that's difficult to reverse, such as transferring a pension or investing a large lump sum

How much does financial advice cost compared to guidance?

Guidance and, in most cases, Targeted Support are free. Financial advice comes at a cost, but the fee structure varies:

• Fixed fee: Aset price for a specific piece of advice, such as a pension review

• Hourly rate: Charged for the adviser's time

• Percentage of assets: Typically 0.5-1% a year for ongoing management, sometimes with a separate initial fee

It's reasonable to ask any adviser for a clear breakdown of costs before you commit.

Most reputable advisers will offer a free initial consultation so you can establish whether advice is worth paying for in your situation before any fee is charged.

When should you seek financial advice?

Certain life events are a strong signal that guidance alone may not be enough:

• Approaching or entering retirement, particularly if you're deciding how to take money from a defined contribution or defined benefit pension

• Receiving an inheritance and needing to decide how to use or invest it tax-efficiently

• Buying a home, especially your first, or navigating a more complex mortgage situation

• Significant life changes such as marriage, divorce, or the birth of a child

• Tax planning, including inheritance tax and pension tax allowances

• Market volatility, if you're unsure whether to adjust your investment strategy

If more than one of these applies, or your finances involve several moving parts, a full financial adviser review is usually worth the cost.

How to find a regulated financial adviser

If you decide advice is right for you, a few checks will help you find the right person:

1. Check they're FCA-authorised: You can search the FCA Register to confirm any adviser or firm is legitimately regulated before you proceed.

2. Decide between independent and restricted advice: Independent advice covers the whole market; restricted advice may be more focused but potentially less comprehensive.

3. Ask about fees upfront: A good adviser will set out how they charge before you commit to anything.

4. Use an initial consultation to check fit: Most advisers offer a free first meeting, use it to ask questions and get a feel for whether they understand your situation.

Unbiased can match you with a qualified, FCA-regulated financial adviser, mortgage broker or accountant based on your specific needs, with no cost to use the service and a typically free initial consultation.