Tom Nelson: What Advice Firms Need to Get Right About Targeted Support

Why It Matters

It forces advisory firms to embed the Consumer Duty into a new product line, balancing compliance risk with growth opportunities in underserved client segments.

Key Takeaways

• Targeted support sits between free guidance and full advice
• Not a light‑touch service; same regulatory discipline applies
• Firms must define groups, justify solutions, monitor outcomes
• Proper governance can expand reach to younger, cash‑rich clients
• FCA will assess both intent and measurable outcomes

Pulse Analysis

The FCA’s introduction of targeted support marks a significant shift in the UK financial advice landscape. Unlike traditional one‑to‑one suitability assessments, this model groups clients with shared characteristics—such as retirees in drawdown or younger savers with excess cash—and offers tailored solutions without the full cost of comprehensive planning. By positioning the service between free guidance and full advice, regulators aim to close the advice gap while maintaining the integrity of the Consumer Duty, ensuring that any intervention demonstrably improves outcomes.

Implementing targeted support demands a rigorous governance framework. Firms must clearly articulate how each client group is defined, why a particular recommendation fits that cohort, and what safeguards prevent outlier mis‑steering. Documentation, staff competence, suitability controls, and outcome monitoring become mandatory, mirroring the discipline applied to regulated advice. The risk of blurring group characteristics with individual circumstances is a focal point for FCA inspections, and firms that treat the service as a simple add‑on risk regulatory penalties and reputational damage.

When executed correctly, targeted support offers strategic advantages. It enables advisers to engage younger demographics, address inertia around pension withdrawals, and provide tax‑efficient options for cash‑rich clients—segments traditionally underserved by full‑service advice. By demonstrating measurable improvements in client outcomes, firms can showcase Consumer Duty leadership, strengthen trust, and potentially capture new revenue streams. The upcoming April 2026 deadline underscores the urgency for firms to build the necessary infrastructure, positioning targeted support as both a compliance imperative and a growth catalyst.