The Financial Conduct Authority (FCA) has confirmed the launch of targeted support, an initiative to help individuals with their specific investment and pension requirements.
The regulator said over the next decade at least 18 million people could be offered help from advice professionals through the scheme, which was first announced in June.
The new service, which the FCA described as ‘ground-breaking’, will accept applications from March and begin in April. It will allow firms to make specific suggestions to consumers to assist them in making better informed decisions on their money.
Targeted support takes the form of a framework for advisers, underpinned by consumer duty. It will enable firms to innovate and better support their customers, the FCA said.
Consumers will receive recommendations, but they will not be based on a full, in-depth individual assessment. Firms will need to make sure the recommendations are suitable and should only be offered when it puts consumers in a better position.
The need for greater support is stark, according to the latest FCA data. There were around 7 million adults in the UK with £10,000 or more in cash savings who could be missing out on the benefits of investing throughout their lives.
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Less than one in 10 people obtain regulated financial advice. Instead, nearly one in five turn to family, friends or social media for help.
Sarah Pritchard, deputy chief executive of the FCA, said: “Targeted support will be game changing. It means millions of people can get extra help to make better financial decisions.
“We also hope it will build greater confidence to invest. While investing will not be right for everyone, we know people in the UK invest less compared to the EU or US. People in the UK could be missing out on the potential benefits of investing in the medium to long term.”
David Brooks, head of policy at Broadstone, said: “Targeted support has the potential to close one of the most persistent gaps in the UK pensions and investment system which currently sees millions of people making long-term financial decisions with little to no guidance or financial advice.
“Empowering firms to give consumers clearer, more tailored nudges is a sensible and pragmatic step that should deliver better outcomes for more savers and investors.
“Key to the success of this initiative will be execution,” he continued. “Firms will need absolute clarity on the advice/guidance boundary to support complex decision making and to ensure that targeted support does not create new risks or uncertainty.”
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Ben Hampton, CEO of advice at Royal London, added: “With the FCA’s final rules on targeted support published, the financial services industry is on the brink of a transformative shift. Its introduction promises to reshape how millions access financial help, particularly at critical life stages such as retirement.
“Our own modelling shows that as many as 21.5m people across the UK could benefit from targeted support, underlining the scale of the opportunity to help people make better decisions and build their financial resilience.”
Yvonne Braun, director of policy, long-term savings at the ABI, said: “Targeted support has the potential to make a real difference to people’s financial lives. At a time when only 9% of people take regulated advice, targeted support will give people help they can rely on when making complex financial decisions.
“The FCA’s new rules mark a significant step towards closing the advice gap and will empower millions.”
James Floyd, managing director at Alltrust Services, said the FCA’s implementation of targeted support “marks one of the most significant regulatory developments in UK financial services in recent years”.
“It has the potential to transform how millions of consumers receive help with pensions and investments, while creating major opportunities for forward-thinking providers,” he said.
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“For SIPPs and SSAS arrangements, the implications could be profound,” he added. “Many members are financially capable but lack the time or confidence to make complex decisions. Today they receive little more than generic nudges; under the new regime, providers could recommend higher contributions, suggest decumulation pathways, or offer diversified investment strategies aligned with consumers’ needs—all without crossing into full advice.
However, Floyd added implementation will require “significant” strategic investment.
“The FCA has before estimated industry-wide costs of £43–£69m, with ongoing annual costs up to £41m,” he said. “Firms will need robust technology, strong data analytics, well-trained staff, and comprehensive monitoring and compliance systems.
“Perhaps the big question is whether targeted support can provide adequate consumer protection,” he added. “I believe it can but only as part of a broader system that includes clear rules, accessible processes, universal baseline safeguards, sufficient funding, and continuous evaluation.”
This story was written by our sister title, PA Adviser
