The ABI calls on the Financial Conduct Authority (FCA) to provide
clarity on incoming targeted support rules to ensure firms can
successfully provide the service to customers.
Targeted support will be a pivotal development in helping
customers to make better financial decisions when navigating
complex pension and investment choices. Under the new rules,
authorised financial services companies will be allowed to share
“ready-made suggestions” with customers to help them manage their
money.
We support the FCA's decision to give firms the freedom and
flexibility to roll out targeted support across a range of
products and scenarios, backed by a clear process for redress if
they fail to meet appropriate standards.
But for maximum impact, firms need clarity on the regulator's
expectations on how targeted support will be offered, and
requirements must be proportionate so it can reach a large
audience. To allow for this, we call on the regulator to:
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Keep targeted support as a one-off service:
Current proposals to monitor customer outcomes of targeted
support could inadvertently turn it into an ongoing advice
relationship, which goes against the intended “point-in-time"
nature of targeted support.
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Ensure firms feel confident to offer the
service: Firms need the rules to be clear and
consistent, so they are confident to provide targeted support
to their customers. The FCA should use the phrase “better
position” rather than “better outcome” in targeted support
rules to describe its goal, be consistent with language
across its rules and draft legislation, and remove rules
around treatment of additional customer information which
increases cost and uncertainty for
firms.
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Clarify how firms can group customers:
Guidance on how customers should be divided into groups (or
"segments") isn't clear enough. FCA fears about ‘overly
individualised' segments may stop firms from using more
customer data even when doing so would lead to better
outcomes. The industry is keen to work together with
regulators and government to develop case studies that could
be published as non-Handbook guidance in conjunction with
final rules.
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Allow signposting to annuity brokerages within
ready-made suggestions: By including annuity
brokerages and bureaus in target support suggestions,
customers will be able to access more options to get the best
annuity rate for their needs.
Clear communication and data sharing will also be important for
targeted support to work. The Information Commissioner's Office
(ICO) guidance on direct marketing, and the Privacy and
Electronic Communications Regulations, will need to be updated.
These changes should make it clear that sending ready-made
suggestions or approaching consumers with a view to delivering
targeted support through electronic messages (like emails or
messages inside an app) shouldn't be treated as direct
marketing.
We emphasised the need for clearer rules and guidance to support
firms in our response to the FCA's targeted support consultation
paper. The regulator is expected to launch a full consultation on
simplified advice in the New Year, as it continues its goal of
finding more ways to help consumers access regulated advice
through accessible and affordable channels.
George Ritchie, Long-Term Savings Policy Manager at the
ABI commented: “We support the FCA's continued
exploration of the financial advice and guidance landscape and
the regulator's focus on supporting more people with complex
financial decisions. While no single solution will entirely close
the advice gap, targeted support is a major leap
forward.
“But to ensure that targeted support becomes the mass-market
intervention envisaged by the FCA, changes are needed to tackle
remaining regulatory uncertainty around ongoing monitoring of
outcomes, treatment of additional customer information, and
customer segmentation. Clarity is key to give firms the necessary
confidence to start offering this novel form of support to
customers.
“As we build up to the final policy statement expected in
December, we'll continue to work closely with FCA, HMT, FOS, MaPS
and consumer groups to help shape final rules.”
Footnotes
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ABI full consultation response can be found here: https://www.abi.org.uk/globalassets/files/consultation-papers/public/2025/08/abi-response-to-cp-25_17-28.08.25.pdf
