Targeted support: FCA proposals for implementation

On 30 June 2025 the FCA published its latest consultation paper (CP 25/17) on targeted support, the proposal to bridge the advice gap which has perhaps drawn most interest from industry. This consultation paper contains the draft rules for the implementation of targeted support planned for 2026.

Recap

Targeted support is a form of advice where a suggestion of a particular product or course of action is made to a designated group of consumers who share common characteristics. Firms will need to make clear that this is not fully individualised advice. The aim of targeted support is to provide ‘better outcomes’ for consumers than if they had not received the support and to work towards bridging the advice gap. See our previous blog posts on the topic here, here and here. 

As a point of terminology, the FCA is proposing in the draft rules and guidance to use the terms ‘situation’ instead of ‘scenario’ and ‘ready-made suggestion’ instead of ‘ready-made solution’.

Points of interest

While firms will clearly want to examine the further commentary from the FCA and draft rules and guidance in detail, we have picked out a handful of particular points of interest:

• Targeted support is intended to be a separate regulated activity requiring its own permission. Firms would need to apply for a Part 4A permission to provide targeted support, regardless of whether the firm holds an existing permission to provide advice on investments. 
• There is a related decision for the Treasury as to whether appointed representatives should be able to provide targeted support, although the FCA sees risk with appointed representatives delivering the service and is consulting on the basis they would not be able to.
• The FCA recognises the concern that existing direct marketing rules could be a significant barrier to firms’ ability to provide targeted support effectively and is continuing to work with the ICO and Government to consider how these challenges could be addressed.
• The FCA will also continue to work closely with the FOS, with both recognising that targeted support complaints will need to be handled differently from complaints about existing forms of advice.
• There may still be practical concerns over the position where a consumer volunteers additional information beyond the pre-defined common characteristics of a consumer segment they are being aligned with, for example in a person-to-person interaction. 
• The FCA has asked whether pension scheme trustees want to provide a form of support like targeted support to their members, a topic we have considered further in our recent blog post here. 

Simplified advice / clarifying the advice guidance boundary

The FCA is also continuing with proposals for a simplified advice regime as another means of addressing the advice gap. Simplified advice would involve a narrower personal recommendation focusing on a consumer’s specific need, assessed with only essential information. The FCA plans to consult on amendments to COBS 9/9A to create a clearer distinction between simplified and holistic advice, providing clarity and giving firms confidence to offer simplified advice. This consultation is expected in early 2026. The FCA confirmed it will not proceed with the previous proposals for a bespoke simplified advice regime. 

The FCA is also continuing with proposals to further clarify the advice guidance boundary, intending to consolidate, simplify and clarify existing guidance at the same time as it sets out new guidance for firms providing targeted support.

Next steps / key dates 

The current consultation period ends on 29 August 2025 and the FCA aims to publish a policy statement by the end of 2025. The FCA has confirmed it will continue to engage with stakeholders and support firms to operationalise targeted support quickly.

Written by Beth Jewell and John Roberts

Our approach to setting a targeted support framework is to use existing requirements where possible, underpinned by the Consumer Duty.

https://www.fca.org.uk/publication/consultation/cp25-17.pdf