The Financial Conduct Authority’s (“FCA”) Targeted Support regime came into force on 6 April 2026, introducing a new regulated activity designed to help bridge the gap between general guidance and individualised financial advice. The FCA estimates that around 23 million consumers are underserved by the existing advice and guidance market.
Targeted Support allows firms to provide ready-made suggestions to consumers based on their alignment with a pre-defined consumer segment, without undertaking the comprehensive assessment normally associated with individual financial advice. The framework was introduced through FCA Policy Statement PS25/22 and is now principally set out in COBS 9B.
What is Targeted Support?
Providing Targeted Support is a regulated activity under Article 55A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (“RAO”).
Broadly, it involves using information about a consumer to place them within a group of people with similar characteristics or circumstances and providing a recommendation that is presented as suitable for that consumer because they fall within that group.
The FCA describes the regime in COBS 9B.1.1G as enabling firms to support consumers at scale, using limited information rather than a comprehensive assessment of their individual circumstances, with the aim of putting them in a better position than if they had not received Targeted Support.
Consumer Segmentation
Consumer segmentation is central to the regime.
Firms must establish pre-defined consumer segments based on a shared financial support need or objective and, where relevant, common characteristics.
Segments must be detailed enough to support a suitable ready-made suggestion, but must not become so personalised that they effectively replicate the comprehensive assessment associated with individual financial advice.
Firms should also identify including and excluding characteristics to help determine which consumers should, and should not, receive a particular suggestion.
For firms using AI or automated customer journeys, this distinction will be particularly important. Technology can support segmentation and scalability, but the level of personalisation must remain within the boundaries of Targeted Support.
Ready-Made Suggestions and Suitability
Targeted Support is not subject to the individual suitability requirements in COBS 9 or COBS 9A where COBS 9B applies.
However, firms must still have reasonable grounds for concluding that a ready-made suggestion is suitable for an individual who falls within the relevant consumer segment.
When delivering the service, firms must also take reasonable steps to ensure that the consumer has been correctly aligned with the segment and that the information used is sufficiently accurate and up to date.
Importantly, firms cannot simply ignore relevant information they already hold. A firm must not provide a ready-made suggestion where it is, or ought reasonably to be, aware of information about the client indicating that the suggestion may not be suitable. The FCA states that a firm ought reasonably to be aware of relevant information that it holds where that information is, or ought reasonably to be, readily accessible to the business area providing the Targeted Support service.
Restrictions on Recommendations
The FCA has placed limits on the types of recommendations that may be made through Targeted Support.
In particular, the regime cannot generally be used to recommend:
- pension consolidation;
- certain Restricted Mass Market Investments or Non-Mass Market Investments; or
- a particular annuity. A recommendation relating to an annuity may only be made within the conditions set out in COBS 9B.4.28R, including that it does not expressly refer to a particular annuity and goes no further than a recommendation relating to the features of an annuity.
These restrictions reflect the FCA’s view that some decisions require a more detailed assessment of an individual consumer’s circumstances.
Consumer Communications and Consumer Duty
Consumer understanding is a key part of the framework.
When a ready-made suggestion is provided, firms must clearly identify the service as “Targeted Support” and explain that the recommendation has not been based on a comprehensive assessment of the consumer’s individual circumstances.
Consumers must also be given sufficient information about the relevant segment and the basis on which the recommendation has been made.
These requirements sit alongside the Consumer Duty under Principle 12 and PRIN 2A. Firms will therefore need to consider product and service design, price and value, consumer understanding and consumer support throughout the Targeted Support journey.
Governance and Monitoring
Targeted Support does not create an ongoing individual suitability obligation.
However, firms must monitor the outcomes generated by the service and regularly review whether their consumer segments and ready-made suggestions remain appropriate.
Effective implementation will therefore require suitable management information, governance, monitoring, testing and escalation arrangements.
The FCA also treats the firm as a manufacturer and distributor of the Targeted Support service, bringing the service within the wider Consumer Duty product and service governance framework.
FCA Authorisation and Capital
Firms must hold the appropriate Part 4A permission to provide Targeted Support. Existing authorised firms will generally need to apply for a Variation of Permission, while new firms will need to apply for FCA authorisation.
Targeted Support is also not permitted business for an Appointed Representative.
Firms should also assess the prudential implications. Under MIFIDPRU 4.4.1R, a MIFIDPRU investment firm with permission to provide Targeted Support is subject to a £500,000 permanent minimum capital requirement, although the overall own funds requirement may be higher depending on the firm’s other activities and applicable requirements.
What Firms Need to Do Now
Firms considering Targeted Support should review their proposed business model before launching the service. Key areas include:
- FCA permissions and regulatory perimeter;
- consumer segmentation and excluding characteristics;
- suitability of ready-made suggestions;
- Consumer Duty and product governance;
- customer communications and disclosures;
- AI and automated decision-making controls;
- prudential requirements; and
- governance, monitoring and record-keeping.
The FCA’s Pre-Application Support Service (“PASS”) is also available to firms considering an application for Targeted Support permission.
How Complyport Can Help
Complyport can support firms with the development and implementation of a Targeted Support proposition, including:
- FCA authorisation and Variation of Permission applications;
- consumer segmentation and ready-made suggestion frameworks;
- Consumer Duty and customer journey reviews;
- prudential and capital requirement assessments;
- governance, monitoring and compliance frameworks; and
- ongoing FCA regulatory support and engagement.
Need support with your Targeted Support proposition? Contact Complyport and book a meeting with one of our Subject Matter Experts.
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