TARGETED SUPPORT IS POSITIVE STEP

We are welcoming the FCA’s proposed Targeted Support, but a word of warning – it may require investment in new systems and processes.

Our director, Vicky Pearce, said: “We believe the new regulated service could create new business opportunities, but it will have to be clearly distinguished from full advice to avoid confusion. That will inevitably require new compliance procedures.”

The FCA’s proposed Targeted Support is intended to help consumers make better decisions about pensions and investments. It is designed to bridge the gap between general guidance and full advice, particularly for those who are underserved.

To offer Targeted Support, firms will have to identify a situation, define a consumer segment and then create a ready-made suggestion for that segment. They will have to disclose the characteristics used to create their definition, that the support is not personalised and any assumptions that have been made in the advice provided.

Vicky added: “Initial reactions to the proposed Targeted Support from our clients have been positive and we are encouraging them to engage with the consultation before the August 29 deadline. We expect it will be the likes of banks, platforms and firms who have an interest in technology that are most likely to benefit, although there may still be opportunities for smaller firms.

“The new regulation could be a real chance to reach individuals who don’t want or can’t afford full advice and should be scalable through digital tools. We are urging our firms to begin to assess their client base suitability and review their business model and segmentation strategy. We will be keeping an eye on progress and we look forward to the publication of the policy statement at the end of the year.”

Contact us

If you would like a more detailed discussion about the opportunities and compliance implications of the proposed Targeted Support regulation, don’t hesitate to contact us.