FCAs Targeted Support implications could be profound

Targeted Support implications could be profound – by James Floyd, Managing Director at Alltrust Services

“With the implementation of targeted support by the FCA underway, it marks one of the most significant regulatory developments in UK financial services in recent years. It has the potential to transform how millions of consumers receive help with pensions and investments, while creating major opportunities for forward-thinking providers.

“Targeted support sits between generic guidance and full financial advice, allowing firms to offer tailored recommendations to groups of consumers who share similar characteristics, without triggering the full regulatory demands of personalised advice. This comes at a time when the FCA’s research has highlighted a stark advice gap: only 9% of people received regulated advice in the past year; 7 million adults hold more than £10,000 in cash without any advice; 12.5 million working-age adults are under-saving for retirement; and three quarters of pension holders over 45 have no clear plan.

“For SIPPs and SSAS arrangements, the implications could be profound. Many members are financially capable but lack the time or confidence to make complex decisions. Today they receive little more than generic nudges; under the new regime, providers could recommend higher contributions, suggest decumulation pathways, or offer diversified investment strategies aligned with consumers’ needs—all without crossing into full advice.

“This would not only improve outcomes but also help firms differentiate themselves in an increasingly commoditised market. However, implementation will require significant strategic investment. The FCA has before estimated industry-wide costs of £43–£69 million, with ongoing annual costs up to £41 million. Firms will need robust technology, strong data analytics, well-trained staff, and comprehensive monitoring and compliance systems.

“While this may favour larger firms, it also creates opportunities for agile, specialist providers with innovative tech-enabled models. Targeted support could usher in a new era of consumer engagement and reshape the future of UK pensions.

“Perhaps the big question is whether targeted support can provide adequate consumer protection. I believe it can but only as part of a broader system that includes clear rules, accessible processes, universal baseline safeguards, sufficient funding, and continuous evaluation.”