For years, the financial services sector has wrestled with the ‘advice gap’ – how to deliver scalable, actionable help so that consumers make sound financial decisions.
But what was once an aspiration is now rapidly becoming reality. The new regime of targeted support is moving from theory to implementation at a speed that is, frankly, remarkable.
At the centre of this shift is the draft amendment to the Regulated Activities Order (RAO), which introduces targeted support as a new form of advice.
This is far more than a semantic adjustment. The Financial Conduct Authority (FCA) recently went beyond the latest consultation paper, publicly adding colour as to how the regime sits on the advice side of a personal recommendation boundary.
The draft framework enables firms to group customers by shared situations and characteristics and provide personalised recommendations. It sets clear boundaries while unlocking the potential of data-driven personalisation.
The real challenge will be stitching the continuum of available support into a coherent consumer offering
The construct provided in the draft legislation outlines the boundaries and basis for this new activity, offering a framework that is both innovative and responsible.
As ever there is a trade-off; the FCA and HMT have been transparent about this since the start of this review. The model may allow cross-subsidy to overcome the significant behavioural cost barriers that exist with advice today, but it stops short of delivering the fully individualised advice reserved only for those paying for bespoke services.
That balance – pragmatic, outcome-focused and transparent from the outset – is the hallmark of this reform. The real challenge will be stitching the continuum of available support into a coherent consumer offering.
But legislation alone doesn’t create a market. Supply and demand must align. Demand is evident; the test is whether firms will step up to build the supply side – it is increasingly clear some firms are already pursuing this at pace.
The FCA is doing its part, fast-tracking authorisations for firms adopting the new model – a clear sign not just of regulatory support, but of a desire to remove barriers to this new regime.
The pieces are falling into place to enable genuine innovation across the continuum of decision-making support
The timelines are ambitious, but realistic, reflecting a determination to modernise the advice landscape by the start of the next tax year.
What stands out most is the Government’s strong political will behind the initiative. The Government has tied targeted support to its broader investment agenda, with the first offerings live in April 2026.
This accelerated timeline, highlighted at Mansion House, demonstrates that this is not incremental change or regulatory housekeeping – it is a strategic priority at the highest level.
Meanwhile, reforms to the Financial Ombudsman Service (FOS) through its redress modernisation work adds another crucial dimension. The expected better alignment between rule-setters and dispute-handlers addresses a longstanding industry concern, offering firms increasing confidence to innovate.
Taken together, these developments signal more than incremental progress. They mark alignment between legislative clarity, regulatory will, political priority and consumer protection. The pieces are falling into place to enable genuine innovation across the continuum of decision-making support. The winners will be those who connect those different offerings coherently.
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Targeted support is designed to complement, not compete with, full, paid-for advice. It sits within a spectrum of support – from general guidance to fully individualised advice – offering scalable help for those who may not need or be able to access bespoke services.
While targeted support will improve outcomes for many, the best outcomes will still be unlocked by the gold standard that is fully individualised advice.
The Consumer Duty has laid the foundation for a principles-based framework that empowers firms to support consumers effectively. As the targeted support rules are finalised, it will be critical to retain flexibility so firms can deliver real impact on the advice gap.
This is an optional regime, and for it to succeed it must generate both commercial value for firms and positive outcomes for consumers.
Efficiency is not enough; targeted support must be demonstrably effective and put customers in a better position
There will inevitably be learnings as targeted support services launch. What matters is an ongoing, constructive dialogue between industry and regulator as the regime refines and embeds.
For firms, the message is clear: this is the moment to lean in. Delivering meaningful, personalised advice at scale is no longer a distant goal – it is within reach.
But it will demand investment, collaboration and a renewed focus on consumer outcomes. Efficiency is not enough; targeted support must be demonstrably effective and put customers in a better position.
By April 2026, the landscape will look very different. For consumers, it promises better access to advice. For firms, it offers new opportunities to engage and serve. For the industry, it represents something rare: meaningful, joined-up progress in tackling the advice gap.
Ben Hampton is CEO of Wealth Wizards
