FCA consultation on ‘targeted support’: major shift should help close the advice gap

Commenting on the FCA consultation on ‘targeted support’ launched today, Erin Sims, Financial Services Senior Analyst, RSM UK said: “The FCA’s consultation marks a major shift in how firms will support consumers making pensions and investment decisions - focusing on outcomes-based regulation, in line with the government’s growth strategy. By proposing a new category of 'targeted support', the FCA is addressing the long-standing advice gap. This will be transformative for consumers who are currently priced out of advice, or need more than generic guidance, but don’t require full financial advice. It’s a positive step to bridging the advice gap. Figures from The Lang Cat’s 2025 Advice Gap report highlighted that 91% of adults have not paid to receive financial advice in the past two years, so this should benefit the majority of consumers who don’t have an adviser to gain better insight. It may also help tackle the issue of consumers relying on spurious advice from unqualified 'finfluencers'.

“However, the proposals also raise important operational and compliance considerations. Firms will need to consider both the capital buffer implications and the fact that simplified advice won’t suit the needs of all customers. They will also need to carefully design their customer support journeys to ensure they are clear, consistent and demonstrably within the new boundaries.

“Under the Consumer Duty, it’s essential that any form of targeted support genuinely helps consumers make better decisions and avoid foreseeable harm. Training, governance and documentation will be key to ensuring that targeted support enhances client outcomes. New technology such as AI and chatbots may also play a big role in this in future.”