The financial services sector has welcomed the FCA’s latest consultation on targeted support – but is calling for greater clarity to ensure the regime delivers for firms and consumers alike.
On Friday, the regulator invited further feedback on how its proposals can be refined and aligned with the wider framework.
James Tothill, investment specialist at Wesleyan, described the consultation as “another step closer to making targeted support a reality and building momentum behind the initiative”.
He added: “There are still many questions about how to implement targeted support effectively and at scale. But it’s encouraging to see the FCA open its support service early to help firms develop their proposals – a clear sign of its commitment.”
Aegon pensions director Steven Cameron said the success of the regime should not be judged by how widely it is used, but by whether it complements rather than cannibalises the advice market.
“Targeted support could help many non-advised customers with key financial decisions, but it will never replace personalised recommendations,” he warned.
“Every effort should be made to protect all sectors of the current advice market and grow the advised population further.”
Cameron also highlighted concerns around PECR restrictions, the role of the Financial Ombudsman Service, and the need for FCA case studies to give firms clarity.
He described the FCA’s decision to rule out pension consolidation as an option as “disappointing”.
PIMFA head of public affairs Simon Harrington said targeted support could be “one of the most important reforms in a generation”, given that 25 million people in the UK have never received advice or guidance.
He called for clearer rules on data collection, consumer segmentation and communication, adding: “The distinction between targeted support and regulated advice must be crystal clear – consumers should understand that suggestions are options, not instructions.”
PIMFA also urged changes on scope, annuities, consumer protections, and appointed representatives, as well as guidance on good and poor practice.
The Investing and Saving Alliance (TISA) welcomed the FCA’s approach but urged government to amend PECR to allow an opt-out system for targeted support.
TISA chief executive Carol Knight said: “Unless PECR is amended, three out of four consumers could remain out of reach. Targeted support can only deliver better outcomes if firms can help those who aren’t currently engaging.”
Head of policy Sophie Legrand-Green added that consistency across digital and offline channels is essential to avoid excluding vulnerable customers.
Industry bodies are united in seeing potential for targeted support to bridge the advice gap, particularly for workplace pension members, but warn success hinges on regulatory clarity, proportionate protections and the removal of legal barriers.
