4 min read

Overview

On 11 December 2025 the Government and FCA published responses to their July 2025 consultations on the introduction of a new regulated activity of providing “targeted support”. The new regime is due to take effect from early April 2026.

Targeted support involves the delivery of ready-made suggestions to clients in situations involving a shared financial support need or objective, by reference to the client’s alignment with a pre-defined consumer segment. Where relevant, a consumer segment should be defined by reference to common characteristics of the individuals within that segment. The service should not involve the provision of individualised advice.

The introduction of targeted support is a central outcome of the Government and FCA’s advice/guidance boundary review. It recognises that the majority of consumers do not take regulated financial advice about making investments and seeks to provide an alternative way of supporting customers’ decision-making, without the need to pay for financial advice. The FCA also intends to consult in early 2026 on simplifying and consolidating its existing investment advice rules and guidance.

An additional aim of the new regime, as stated in the Government’s Financial Services Growth and Competitiveness Strategy, is to “Address risk aversion to retail investment, to the benefit of our citizens, markets and wider economy”. This aim is also reflected in the FCA’s policy statement, in which it comments that it wants to help to change the lack of a strong retail investment culture in the UK.

The new regulated activity

The new regulated activity of targeted support will be introduced into legislation by amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the RAO). These are expected to come into effect on 6 April 2026 and will:

  • introduce a new specified activity of providing targeted support; and
  • set out that where a person provides targeted support they are not advising a person for the purposes of article 53 of the RAO (advising on investments).

Government response document

As well as confirming the new regime will go ahead, the Government response document in particular states that:

  • appointed representatives will not be able to deliver targeted support from the point of introduction of the new regime, but that this will be reviewed again once the proposed reforms to the appointed representative regime have been implemented
  • the Government will develop secondary legislation to enable workplace pension providers to deliver targeted support communications to members who have not opted-out of direct marketing (given concerns about the application of data protection and direct marketing rules).

FCA policy statement

The FCA policy statement (PS25/22) sets out feedback to its consultation and near-final rules. The final rules will be put in place once the legislative amendments have been made.

The core provisions relating to the new activity of targeted support will be set out in a new Chapter 9B of the FCA’s Conduct of Business Sourcebook (although changes will also be required to various other parts of the Handbook). Key aspects of the new regime include:

  • firms should design a targeted support service to be provided only where the firm has reasonable grounds to consider that the provision of the service would put individuals for whom it is designed in a better position than if that support were not provided
  • consumer segments should be defined at a level of detail that is sufficiently granular to enable the firm to assess whether a ready-made suggestion would be suitable for an individual within that consumer segment, but not at a level of detail which a firm in the business of providing investment advice would reasonably associate with a comprehensive consideration of a person’s characteristics or circumstances – this is to ensure the distinction from providing advice is preserved, but may be a difficult balancing act in practice
  • firms can recommend an annuity as, or as part of, a ready-made suggestion under targeted support but only where specified conditions are met (including that the recommendation does not expressly refer to a particular annuity)
  • a ready-made suggestion must not include an express or implied recommendation to consolidate any of the pension arrangements that a client holds - the FCA takes the view that a recommendation to consolidate pension arrangements would require a more individualised assessment of a client’s circumstances than firms are permitted to provide through targeted support
  • when a firm provides a ready-made suggestion to a client, it must clearly refer to the service by which the ready-made suggestion is provided as ‘Targeted Support”.

Accompanying publications

The FCA has also published two joint statements accompanying its policy statement – a joint statement with the Financial Ombudsman Service clarifying how the FCA and the FOS will work together in the event of future complaints relating to targeted support and a joint statement with the Information Commissioner’s Office on how firms can communicate with consumers in the context of existing direct marketing rules.