29 August 2025
PIMFA, the trade association representing wealth managers and financial advisers across the UK, today issued its response to the Financial Conduct Authority’s (FCA) latest consultation on Targeted Support.
While PIMFA strongly supports the FCA’s proposals, it is also calling for clarity in key areas to ensure the regime delivers on its aims and avoids consumer confusion.
Simon Harrington, Head of Public Affairs at PIMFA, says: “Targeted support has the potential to be one of the most important reforms in a generation. There is a clear support gap which currently exists in the UK with 25 million people never having received professional advice or guidance. Targeted support can go some way to bridging that gap. Whilst we believe that this gap manifests itself across retail investment and pensions, because of the nature in which consumers tend to engage with their personal finances, we still believe that it will be most impactful for consumers making retirement decisions.
“We strongly support the FCA’s ambition to close the UK’s support gap, but to make this work for consumers and firms alike, we think these proposals would benefit from more clarity in a few key areas – specifically around data collection, and the way in which suggestions are communicated to consumers.
“The distinction between targeted support and regulated advice must be made crystal clear – consumers should understand that suggestions are options, not instructions. Ultimately, targeted support should be used to help consumers understand what they could do in certain situations, rather than tell them what they should. Where consumers do want more assertive direction, we believe that simplified advice remains an option the FCA should consider. Provided that it is accompanied with clear rules, focuses on servicing specific transactions and, crucially, is accompanied with a review of the qualification requirements, simplified advice can play a role in helping firms provide much needed certainty to consumers with clear needs at a cost which is affordable to them and to the firm.”
Other key points raised by PIMFA as part of their consultation response include:
· Consumer segmentation: PIMFA considers that a significant challenge for firms in designing targeted support journeys will centre on data – specifically how they collect it and how much they need. According to PIMFA, this has not been addressed comprehensively enough in the proposals or the rules thus far. PIMFA urges the FCA to produce guidance for firms on what data they could collect and how they could go about segmenting their consumers, rather than prescribing this, so the regime is reasonably flexible for firms.
· Better outcomes principle: Supports FCA’s use of “better outcomes” rather than “better position” but calls for clearer wording in the rules to confirm that targeted support should only be provided where it can be expected to deliver a better outcome than doing nothing at all.
· Scope restrictions: PIMFA supports limiting targeted support to pensions and ISAs but opposes inclusion of General Investment Accounts and high-risk products, warning these could undermine policy intent.
· Annuities: PIMFA also supports exclusion of sales of specific annuities from targeted support but opposes FCA’s proposed two-week delay between suggestion and purchase as detrimental, risking confusion or disengagement among consumers.
· Consumer protections: The trade body calls for greater transparency by asking firms to disclose the assumptions underpinning consumer segmentation and suggestions, as well as FCA/FOS joint guidance and case studies to avoid disputes over whether advice has been given, and supports FSCS protection for targeted support.
· Appointed Representatives (ARs): PIMFA urges FCA to allow ARs in consumer investment and retirement markets to deliver targeted support where appropriate controls and oversight are in place rather than a blanket ban.
· Implementation: PIMFA supports targeted support being free at the point of use, no additional record-keeping requirements, and a robust but not rushed authorisation process. However, it also warns that a free model could create unintended commercial incentives for firms as well as favouring firms which operate vertically integrated models.
Simon Harrington adds: “The FCA deserves credit for its collaborative approach and ambition. These proposals represent a major step forward in giving people the tools they need to make better choices and should have a positive impact in helping non-advised consumers make complex investment decisions.
“With some adjustments, the targeted support regime, combined with simplified advice and holistic financial planning, can create a continuum of support that helps consumers at every stage of their financial lives.”
PIMFA’s consultation response is available in full here.
