Targeted support is designed to fill that gap. The FCA’s final rules, set out in PS25/22, go live from 6 April 2026, allowing authorised firms with the right permission to offer suggestions designed for groups of consumers who share common characteristics. It covers pensions and retail investments, and it is aimed squarely at the parts of the market the existing advice and guidance framework has not served well.
The distinction from advice matters and is worth stating plainly. Targeted support is not personal advice. It does not start with a full fact-find, and it does not produce a recommendation built around one individual’s circumstances. Instead, firms identify a group of consumers with relevant shared characteristics and offer that group a ready-made suggestion. A pension provider, for example, might identify customers approaching retirement who are holding their entire pension in cash, and offer that group a suggested course of action. A platform might identify consumers sitting on large uninvested cash balances and set out a possible next step for people in that position.
The FCA’s reasoning is straightforward. Pensions and investments sit at the centre of long-term financial wellbeing, yet the regulator estimates that around 23 million consumers are currently underserved by the markets for advice and guidance. That is not 23 million people needing a full financial plan. It is a great many people who could benefit from something more useful than a webpage explaining risk in general terms.
Inertia is a financial decision, even when it does not feel like one. Someone who leaves long-term pension savings in cash for years avoids market volatility but takes on inflation risk instead. Someone who never reviews an old workplace pension can miss charges, drift in asset allocation, or better retirement income options. Someone approaching retirement may have no clear sense of whether annuity, drawdown, cash withdrawal, or some blend of the three deserves serious thought. Generic guidance can describe the options. It often stops exactly where confidence is needed most.
Targeted support tries to move the conversation from “here is some information” to “people with characteristics like yours may want to consider this”. That sounds modest, but it is a meaningful shift for the regulator to make. It accepts that information on its own does not reliably produce good outcomes. The barrier for most people is not ignorance. It is overload, uncertainty, and a fear of getting it wrong.
Behind the scenes this will demand real governance. Firms cannot simply invent categories and push products through them. They need to design target groups properly, test whether the suggested action is likely to suit that group, explain the limits of the support clearly, and monitor what actually happens to outcomes. Communications must make clear that this is not personal advice, and that consumers with more complex circumstances may still need it. Firms also have to weigh vulnerability, comprehension, conflicts of interest, cost, and whether the support could cause foreseeable harm.
Defining a “group of consumers with common characteristics” sounds simple and is not. Too broad a group produces suggestions with little real meaning. Too narrow a group starts to look like personal advice by another name. The skill lies in choosing characteristics that genuinely matter to the decision at hand: age, contribution history, time to retirement, cash balances, risk exposure, product type, engagement behaviour. Each has to earn its place, not just be available in the data.
Data itself takes on a new role under this regime. Firms already hold information on balances, holdings, contributions, retirement dates, cash levels and behaviour. The new rules allow some of that to be used to identify where support might help. That is an opportunity, but it comes with responsibility attached. Good data can nudge someone towards a better decision. Poorly interpreted data can manufacture false confidence. A consumer holding a lot of cash might be doing so for good reason: an imminent house purchase, a health concern, an inheritance being held for a specific purpose, a short time horizon. The support has to be framed carefully enough to allow for that.
For advice firms, targeted support is not obviously a threat to full advice. If anything, it may sharpen the case for it. Targeted support suits common, bounded decisions. Personal advice stays essential wherever circumstances are complex, objectives pull in different directions, tax issues are significant, family arrangements matter, capacity for loss needs judgement, or several planning areas interact at once. A ready-made suggestion can genuinely help. It cannot replace judgement.
For investment managers and platforms, the challenge is making support useful rather than merely compliant. A beautifully worded message nobody reads is not a good outcome, and neither is a slick digital journey that leaves the consumer more confused than before. Firms will need to test whether people understand the support, act on it appropriately, and end up better off over time, not just more engaged.
Practically, banks, building societies and platforms are likely to get the most use out of the new regime, since it works best where a firm already has a direct relationship with the consumer and the underlying data to support it. Fund managers with no direct retail channel, or advisers built around high-net-worth clients, may find it fits their business model less naturally.
There is a behavioural dimension too. Consumers are likely to trust a ready-made suggestion more than generic guidance, but less than advice, and that middle status has to be handled honestly. The communication should not oversell its own certainty. It should set out the group, the assumption behind it, the suggested action, the risks, and the circumstances in which the suggestion might simply not fit. The best targeted support will probably read as plain rather than impressive.
The regime sits inside the wider Consumer Duty framework, and good outcomes remain the test. Firms should be asking whether targeted support genuinely helps consumers make better decisions, not just whether it increases engagement or assets under administration. A nudge that moves someone into unsuitable risk has failed, however well it was worded. A nudge that helps a disengaged consumer take one sensible step forward may be worth a great deal.
The advice gap will not close because of one regulatory change. Some people will still need full advice. Some need debt help, benefits guidance, or regulated mortgage advice rather than investment support. Some will stay disengaged whatever tools are put in front of them. But targeted support gives the industry a genuine middle lane, and middle lanes matter. Not every journey needs a chauffeur. Not every traveller should be handed a map and left to it.
The promise here is practical: fewer people stuck between doing nothing and paying for advice they may not need. The test will be whether firms use the new freedom with restraint, clarity and evidence, rather than simply as a lighter-touch sales channel.
Sources
Financial Conduct Authority, PS25/22: Supporting consumers’ pensions and investment decisions — rules for targeted support.
Financial Conduct Authority, FCA opens authorisation gateway for targeted support, March 2026.
Financial Conduct Authority, Consumer Duty focus areas.
KPMG UK, Targeted support: final rules, February 2026.
Money and Pensions Service, MoneyHelper guidance services.
