- Final rules enabling financial firms to offer ‘Targeted Support’ to investors have today been unveiled by the Financial Conduct Authority (FCA | PS25/22: Supporting consumers’ pensions and investment decisions: rules for targeted support)
- The regulator lauds the new regime as a ‘game changer’ for retail investing, potentially enabling millions of people to receive more useful help about their finances
- Under the new regime, which is expected to come into force in April 2026, firms will be able to make suggestions to cohorts of customers aimed at improving their financial position
- One key area of uncertainty remains whether government rules on marketing will be changed to exempt Targeted Support communications
Tom Selby, director of public policy at AJ Bell, says:
“The FCA is bang on when it says Targeted Support has the potential to revolutionise the help millions of people receive about their finances. The status quo simply isn’t working, with the gold standard of regulated advice out of reach for the majority and generic guidance failing to give people sufficient help with what can often feel like an intimidating financial landscape. Targeted Support will allow firms to help customers make better informed decisions about saving, investing and retiring. This in turn should boost engagement and understanding and give more people a fighting chance of building financial resilience both now and in the future.
“Numbers set out by the FCA today lay bare the challenge these reforms are looking to tackle, with around 7 million adults with large cash savings pots potentially missing out on the benefits of long-term investing. Fewer than 1-in-10 receive regulated advice, with over 90% essentially left to fend for themselves. Without this decisive action from the regulator, the danger is that people will turn to less reliable sources of unregulated help which all-too-often won’t have their best interests at heart.
“The FCA deserves significant credit for delivering a package of changes, in close consultation with the financial services industry, that have the potential to make a real difference to people’s financial lives. This long-term approach contrasts sharply with what we have seen from the government, which announced a complex overhaul of ISAs based on little evidence and without any formal consultation. It is telling that while Targeted Support has been widely praised by firms, those ISA changes have few, if any, supporters among the retail investing community.
“One area of major uncertainty that remains relates to rules governing marketing communications. Given any Targeted Support intervention will need to abide by the FCA’s Consumer Duty principles and aim to put people in a better financial position than prior to the intervention, it would make little sense for the application of these rules to become snared up in regulations designed to prevent people being bombarded with unwanted marketing gumpf.
“Research from The Investing and Savings Alliance (TISA) suggests as few as 25% of financial services customers opt to receive marketing communications of this nature. This points to the fact that, without an exemption, there is a risk significant numbers of people will not receive vital communications aimed at helping them make better-informed financial decisions. This cannot be the intent and we hope the government moves to close what looks like a gaping hole in the reforms.”
