Guidance for Navigating Financial Lives Gets a Once-in-a-Lifetime Update, Aiding Millions
The Financial Conduct Authority (FCA) has unveiled plans for a new "targeted support" regime, aimed at helping consumers make better financial decisions, particularly those involved with pensions and retail investments. This initiative is designed to address the "advice gap" between consumers who can access full financial advice and those who currently receive little or no tailored help.
The FCA's targeted support allows authorised firms to provide suggestions specifically designed for groups of consumers who share common circumstances or characteristics, rather than personalised advice tailored to each individual. Examples include people drawing down unsustainably on their pensions, those who are not saving adequately for retirement, or consumers holding excess cash in current accounts.
The FCA proposes a bespoke regulatory framework for targeted support, distinct from existing financial advice rules. This includes a dedicated authorisation gateway and specific conduct standards to ensure consumer protection while encouraging innovation and greater access. The government supports this by proposing amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) to create targeted support as a new regulated activity, separate from existing advice services.
The FCA’s targeted support is intended to be a stepping stone—helping consumers gain confidence and potentially leading them to seek more simplified or comprehensive advice if needed. People with excess cash savings in current accounts can receive suggestions on better ways to put their money to work, encouraging investment and improved financial outcomes. Consumers who might be unsustainable pension drawdown users or those not saving enough for retirement can get early, tailored assistance to improve their financial planning and long-term security.
The proposals are part of a broader government strategy, including the workplace pension roadmap, to improve pension saver outcomes and promote long-term financial resilience for working people. The FCA’s consultation on the draft rules for targeted support is open until 29 August 2025, with government draft legislation and policy notes scheduled to be published alongside the Chancellor’s Mansion House speech on 15 July 2025.
Feedback from stakeholders will inform the final framework, aiming to balance consumer protection with enabling firms to innovate in supporting consumer financial decisions. The FCA has employed a 6-week policy sprint to carry out this work, involving firms, consumer representatives, and other members of the regulatory family in designing consumer journeys and rules. The goal is to reduce the 'advice gap' by providing consumer access to a choice of guidance, targeted support, simplified advice, and full financial advice.
Sarah Pritchard, deputy chief executive of the FCA, wants to help consumers navigate their financial lives and plan for the long term. Chancellor of the Exchequer, Rachel Reeves, believes these reforms will make a real difference in helping working people make better long-term financial decisions. The FCA's proposals include inbuilt protections for consumers, and the reforms are expected to set the framework for the next 20-30 years, to support consumers now as well as future generations.
According to the FCA's latest Financial Lives survey, only 9% of adults received financial advice about their pensions or investments in the previous 12 months. These new reforms aim to support growth by enabling increased investment and innovation, ultimately putting more money in consumers' pockets as part of the Plan for Change. It is estimated that there are about 7 million adults in the UK with £10,000 or more in cash savings who may be missing out on the benefits of investing throughout their lives.
Investing advice for specific consumer groups, such as those with excess cash savings or inadequate retirement savings, may be offered through the FCA's new targeted support regime, aiming to promote financial decision-making improvements and long-term security. Personal-finance advice tailored to these groups can be accessed through this initiative, which is a stepping stone towards more simplified or comprehensive advice when needed.
