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Rethinking ongoing advice to deliver client value
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13/01/26
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Preparing for the FCA targeted support regime
Following its joint review with the government on the regulatory boundary between financial advice and guidance, and two consultation papers, the FCA has published its policy statement for the new targeted support regime.
The new regulatory framework is designed to provide tailored support for pension and retail investments, helping customers make more confident financial decisions. Statistics published by the regulator suggest that around 7 million adults in the UK with cash savings of £10,000 or more may be missing out on investment opportunities – highlighting a clear need for accessible guidance.
To give firms as much time as possible to prepare, the FCA has published its near-final rules. Firms will be able to begin applying for permission to provide targeted support from March 2026, ahead of the regime’s expected implementation on the 6th April 2026 (subject to legislation). Some firms have already engaged via the FCA’s new Pre-application support service.
What this means for firms
For firms operating in pensions and retail investments, the new targeted support regime represents both a strategic opportunity and a compliance challenge. Under the near-final rules, targeted support will be established as a distinct regulated activity, meaning firms must obtain permission to offer it once the authorisation gateway opens in April.
This marks a departure from the traditional binary of generic guidance versus personalised advice. Firms will be able to provide ready-made suggestions tailored to groups of customers with similar characteristics, without conducting a full, individual assessment – so long as these suggestions are designed to put the customer segment in a better position than if no support were otherwise provided.
Frameworks that fit
Delivering targeted support will require firms to rethink customer segmentation, governance and communication protocols. Under the FCA’s framework, customer segments must be sufficiently granular to justify the support offered but must not cross the threshold into individualised advice. Firms should also develop and maintain robust monitoring and governance arrangements to ensure their services deliver the intended benefits.
The underlying principles of the Consumer Duty remain paramount, as firms must continue to demonstrate that the support they provide genuinely helps consumers pursue their financial objectives and avoid foreseeable harm. Customer communications must be clear, transparent, and compliant, with direct marketing and data protection expectations set out in the joint FCA/ICO guidance. Careful product governance is essential to demonstrate suitability for defined segments and to ensure compliance with the FCA’s PROD rules.
Action before April
The regime signals a meaningful shift in how firms can help consumers navigate pensions and investment decisions – and it raises the bar on what “good” looks like in practice.
For firms willing to invest early in the right governance, data foundations and customer-centric design, the new framework offers an opportunity to close long-standing advice gaps and deliver support at scale in a way that is both commercially viable and compliant.
Firms need to invest time in ensuring their customer segments are appropriately defined and that their solutions are suitable for the defined segments.
As ever, the challenge will lie in execution: ensuring robust controls, evidencing good outcomes and maintaining clarity about where targeted support ends and regulated advice begins. With the countdown to April 2026 already underway, firms that move now to build these capabilities will be best positioned to seize the opportunity and meet the FCA’s expectations with confidence.
TCC regulatory practitioners can help firms navigate the new targeted support regime, from strategy and governance to customer communications, ensuring compliance while delivering real consumer value. Get in touch today to find out how we can help your firm ahead of the April deadline.
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