Since 6 April 2026, financial advice and wealth management firms have had a new option sitting between generic guidance and full regulated advice: targeted support. It’s the first concrete outcome of the FCA’s Advice Guidance Boundary Review, and for firms that have spent years watching clients disengage rather than pay for full advice, it’s worth understanding properly rather than filing away as “more regulatory change”.
What targeted support actually allows
Targeted support is a new regulated activity — firms need specific FCA permission to offer it, applied for through the authorisation gateway that opened alongside the regime. It covers pensions and retail investments only, not the wider range of products a full financial adviser might discuss with a client.
The practical change is that a firm with the right permission can make a specific, situation-based recommendation to a group of consumers who share common characteristics — for example, savers of a similar age sitting in cash within a pension, or investors holding a fund that’s closed to new business — without carrying out an individual suitability assessment for each one. That’s the gap targeted support is built to close: plenty of people never get as far as paying for full advice, and generic guidance alone often isn’t enough to get them to actually do anything.
Why this matters for smaller firms, not just the big providers
The early coverage of targeted support has mostly focused on large pension providers and platforms, who can build the data infrastructure to identify “common characteristic” groups at scale. But the regime isn’t closed to smaller, local advice practices — a firm serving clients across a town like Sale or Hanham can, in principle, apply for the same permission and use targeted support to re-engage existing clients who’ve gone quiet rather than only new ones brought in through paid advice.
Whether that’s worth doing depends on volume. Targeted support comes with its own conduct standards and a genuine reporting burden — firms have to track uptake, opt-out rates, how many recommended actions clients actually followed through on, complaints, and referrals on to full guidance or advice, plus their own fair value assessment of the service. For a firm with a handful of clients who’d benefit, the compliance overhead may simply not pencil out against building the same reach through ordinary client contact.
What to check before applying for permission
A few practical points are worth working through before deciding either way:
- Scope. Targeted support only covers pensions and investments — it doesn’t extend to protection, mortgages or general insurance, so it won’t replace a broader advice offering.
- Data. Identifying a genuine “common characteristic” group, rather than a loosely defined one, needs decent client data behind it — this is as much an operations question as a compliance one.
- Reporting. The FCA expects ongoing data on how targeted support is used, not just a one-off application. Firms should be honest with themselves about whether they can sustain that reporting before committing.
- Interaction with existing services. Targeted support sits alongside, not instead of, existing guidance and advice services — a client who needs more than a targeted nudge still needs a route through to full advice, which usually means a local independent adviser rather than an automated recommendation.
What’s likely to follow
The FCA has said it plans further consultation during 2026 on simplified advice and on clarifying the wider advice/guidance boundary — targeted support is the first piece of a bigger reform, not the whole of it. Firms weighing whether to apply now are also, in effect, deciding how early to get involved in a regime that’s still being built out. There’s no wrong answer here: plenty of well-run advice practices will reasonably sit this first wave out and wait to see how the reporting requirements settle before committing the time to apply.
For firms that do want to explore it, the FCA’s own policy statement (PS25/22) and the near-final rules published in late 2025 are the primary source — worth reading directly rather than relying on a summary, given how specific the conduct requirements are.
