FCA’s targeted support proposal sparks debate on advice boundaries and consumer access

Editorial

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According to the FCA report, 12.5 million consumers need support in saving for retirement, and 38% of the working-age population are under-saving for the future. Last year, 59% of adults did not use financial advice on investments, savings, pension, and retirement plans and only 9% received regulated financial advice.

The targeted support scheme is aimed at pension providers, building societies, investment firms, wealth managers, financial advice firms, and consultancy firms. The objective of the proposal is to provide a portal of financial advice to consumers that need support in their financial decisions.

The consultation for the targeted support proposal opened on 30 June and closed on 29 August 2025. In the proposal, firms would pre-define situations where a certain group of consumers would need support in, and provide “ready-made” suggestions based on these scenarios. Now the FCA is moving onto the next phase of policy development, to implement the targeted support scheme with investment and pension firms.

PIMFA, a wealth and financial advisor trade association responded to the targeted support proposal, demanding further clarity on data collection and how suggestions are communicated to consumers.

Simon Harrington, head of public affairs at PIMFA, detailed: “The distinction between targeted support and regulated advice must be made crystal clear – consumers should understand that suggestions are options, not instructions. Ultimately, targeted support should be used to help consumers understand what they could do in certain situations, rather than tell them what they should. Where consumers do want more assertive direction, we believe that simplified advice remains an option the FCA should consider. Provided that it is accompanied with clear rules, focuses on servicing specific transactions and, crucially, is accompanied with a review of the qualification requirements, simplified advice can play a role in helping firms provide much needed certainty to consumers with clear needs at a cost which is affordable to them and to the firm.”

PIMFA further suggested that the FCA provide more guidance on customer segmentation and the wording of “better outcomes” for consumers as described in the proposal. The organisation also warned against including General Investment Accounts and high-risk products in targeted support, which involve more risk. PIMFA advises the FCA to lift the ban on appointed representatives in investment and retirement markets to deliver guidance, and supports the free model of the scheme despite noting that commercial incentives could arise for certain firms.

The Investing and Saving Alliance (TISA) has also responded to the FCA proposal, warning that consumers who need support will be excluded without a fix to the Privacy and Electronic Communications Regulations (PECR). TISA stated that the targeted support should be consistent across digital and non-digital communication to include those who are not technology-savvy.

Sophie Legrand-Green, head of policy at TISA, commented: “Targeted Support is a smart, consumer-friendly reform, but unless PECR is amended, three out of four consumers could remain out of reach. Our recommendations are pragmatic: enable opt-out outreach so firms can help those who aren’t currently engaging and set clear guardrails so staff can deliver pre-defined support without straying into advice. If we do that, Targeted Support will scale with confidence across every channel; get it wrong and we risk entrenching disengagement.”

Both PIMFA and TISA support the FCA reform, but require further planning and adjustments to ensure that the support reaches consumers who need it in a way that is accessible and efficient.