Targeted support: what the FCA's new regime means for IFA pipelines
Six months after go-live: what the rules allow, who is using them, which savers move on to full advice, and whether your firm should get involved.
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Ever since the FCA floated targeted support, advisers have argued about what it is. One view is a cheap, automated rival that picks off the easy clients. The other is a funnel: millions of people nudged into thinking about their pensions for the first time, some of whom would realise they needed proper advice. Six months after go-live there's some evidence, not enough to settle the argument, and enough to help a small firm decide what to do in the meantime.
We should say where we're coming from. We book pension appointments with independent advice firms, so we think about this the way a referrer would: does it make the people arriving at an adviser's door better prepared, or does it keep them away?
What is targeted support?
Targeted support came out of the Advice Guidance Boundary Review, a joint Treasury and FCA project that ran from a discussion paper in December 2023 (DP23/5), through consultations on pensions in December 2024 (CP24/27) and on pensions and investments in June 2025 (CP25/17). The FCA published near-final rules in PS25/22 on 11 December 2025, confirmed them on 26 February 2026, opened applications on 2 March, and the regime went live on 6 April 2026. The conduct rules live in COBS 9B.
The mechanism is simple to describe. A firm designs consumer segments (people who share characteristics such as an age band, pot size, how much they're withdrawing or how much cash they hold) and a ready-made suggestion for each. It uses a limited amount of information to place a customer in a segment and gives them the suggestion designed for that group. It's more specific than guidance, because it can say "people in your position might consider this". It stops short of advice, because nobody has assessed the individual's full circumstances.
The FCA's own examples, from its March 2026 guidance on designing segments, give the flavour:
- People holding more cash than they need as an emergency buffer, who might consider investing
- People drawing from a pension at a rate that may not be sustainable
- People working out how to take an income from their pension
- People who may be saving too little for retirement
The FCA's stated reason is scale. It estimates about 23 million consumers are underserved by the advice and guidance markets. Its Financial Lives survey found 8.6% of UK adults (4.6 million people) received regulated advice on investments, pensions or retirement in the 12 months to May 2024 (FCA Financial Lives 2024).
How is targeted support different from advice and guidance?
The table below is the version worth having in front of you before talking to a client who'd used it. The simplified advice column is proposed rules, not live ones.
| Guidance (MoneyHelper, Pension Wise) | Targeted support | Simplified advice (proposed) | Full advice | |
|---|---|---|---|---|
| Personal recommendation? | No | No: a suggestion designed for a group | Yes, for straightforward needs | Yes |
| Information used | Whatever the person shares | Limited: enough to place them in a segment | Proportionate to the need | Full fact-find, risk, capacity for loss |
| Permission | Free government-backed services (MoneyHelper, Pension Wise) | Separate targeted support permission | Advising permission | Advising permission |
| Can it recommend consolidation or deal with DB? | No | No | Depends on final rules | Yes; advising on a DB transfer also needs pension transfer permission |
| Cost to the consumer | Free | Often free; firms may charge if it's fair value and disclosed | Intended to cost less than full advice | Adviser's fee |
The line that matters most for advisers is the consolidation one. Under COBS 9B a targeted support suggestion must not recommend pension consolidation and can't address safeguarded benefits. Consolidation is one of the most common reasons people come to an adviser: the FCA's 2025 advice-firm survey found it was the main objective for 13% of advised clients. That work stays with you.
Who is offering targeted support so far?
Fewer firms than the launch coverage suggested. The FCA said in a speech on 18 September 2026 that nine firms had been authorised. A freedom of information response reported by Professional Adviser on 1 July put it at 13 applications and seven approvals at that point. Professional Pensions headlined go-live week with "slow start expected", which has turned out to be fair.
| Firm | What's public (as at 27 September 2026) |
|---|---|
| Royal London | Permission announced 7 April; app-based ISA service launched 20 April 2026 |
| Quilter | Permission announced 8 April; offered through Quilter Invest from June 2026 |
| L&G | Permission announced 1 May; first use case aimed at workplace pension members fully invested in cash |
| Aviva | Permission announced 17 June; phased rollout planned from summer 2026, starting with pension customers |
| Vanguard | Offers a targeted support investment suggestion to new customers on its UK site |
| Monzo | In-app service launched earlier in 2026, according to the FCA |
Two patterns stand out. First, the early launches are mostly investment and cash use cases (ISAs, cash sitting in a default fund), not retirement income. Second, they come from big providers talking to their own existing customers. The one outcome figure the FCA has shared is that Monzo customers who received a suggestion were 33% more likely to open an investment account than comparable customers who didn't. That's a nudge working; it doesn't mean a stream of people asking for advice.
Advice firms are in the picture too. NextWealth reported on 22 September 2026 that 23% of advice firms offer or are considering targeted support, from a June survey of 318 advice professionals (NextWealth).
Which needs can't targeted support address?
The FCA has more or less written the answer into its guidance: "if a firm can't define a suitable suggestion without undertaking a comprehensive consideration of a consumer's circumstances or characteristics, it's likely that the consumer will be in a situation that can't be addressed through targeted support." COBS 9B also says firms should, where appropriate, tell consumers that more comprehensive individualised advice is available. That's guidance, not a duty to refer anyone to an IFA.
Putting that together with the rules, these are the decisions where targeted support runs out, and where a saver who wants help has to look for advice. It's a list of needs, not a forecast of who will turn up:
- Whether to combine pots. A targeted support suggestion can't recommend consolidation. Someone with several pots can still get a suggestion on a different question, such as how much to withdraw.
- Anything involving safeguarded benefits. Targeted support can't be given in relation to final salary pensions or other safeguarded benefits.
- A drawdown plan built around one person. A suggestion that a withdrawal rate may be unsustainable is a prompt. Turning it into a plan for that person's spending, other income and tax is advice.
- Joint planning for couples, where the answer depends on two sets of pensions, two State Pension ages and one household budget.
- Inheritance questions. From April 2027 most unused pensions count towards the estate for IHT (more in pension inheritance tax 2027). That's a personal calculation by definition.
What nobody has published is the wealth profile of targeted support users. The early use cases (cash sitting in workplace default funds, first-time ISA investing) suggest many will have modest balances, but that's our inference from what has launched so far. If your firm has a minimum (the average across UK advice firms is around £168,000, according to Dynamic Planner's 2026 research), the useful question is how many targeted support users will clear it, and there's no answer to that yet.
Will targeted support grow or shrink your pipeline?
Nobody knows yet. The arguments cut both ways, and there's no outcome data.
For growth. An Opinium poll of 200 IFAs (2 to 9 March 2026) found 46% thought targeted support would make people more likely to seek independent advice, against 19% who thought less likely (Financial Reporter). The logic is sound. Someone who has been told their cash is dragging or their withdrawals look high has been prompted to think about the problem, which is usually the hardest step.
Against. Some people who might eventually have paid for a one-off piece of advice will now get "good enough" for free. That's mostly at the lower end of the market, where the fee would have been a large share of the pot. And the regime is small so far: nine firms, mostly investment use cases, no published referral data.
What we don't know. How many targeted support users have gone on to paid advice, and whether the providers running it will point people to independent advisers or to their own advice arms. Some of the firms with permission also own advice businesses (Quilter and Aviva, for example). If you're an independent firm, don't assume the funnel ends at your door.
Our working assumption, and it is only that: with nine firms authorised and mostly investment use cases live, we wouldn't plan headcount around targeted support in 2026 or 2027. The more likely benefit is that some people who do reach an adviser will have thought about their problem already and know the difference between a suggestion and advice. If referral data shows otherwise, that assumption should change.
Should IFAs offer targeted support, partner, or ignore it?
Three options. For most small independent firms, the third is the honest answer for now.
Offer it yourself
What it takes, at minimum:
- A variation of permission for the targeted support activity (an appointed representative can't use its principal's)
- Designed consumer segments and ready-made suggestions, tested against the FCA's segment guidance
- Consumer Duty evidence of fair value, and advance disclosure of any charge
- Records of how each customer was placed in a segment, and a complaints process (the FCA and Financial Ombudsman Service have published a joint statement on targeted support complaints)
- A check with your PI insurer that the new activity is covered
- The systems to deliver it at a volume that justifies the build
The economics favour firms with a large existing customer base to segment, which is why the early adopters are providers and platforms. For an advice firm, the plausible use is with your own clients' families or with smaller clients below your advice minimum: a way to serve them without a full advice process. If that's a problem you have, it's worth a look. If it isn't, the build cost is hard to justify.
Partner with someone who offers it
The idea is to be the advice firm that a provider's or employer's targeted support service points to when someone needs more. It's attractive in theory. In practice, get answers to these before signing anything, and run them past compliance:
- Is any payment in either direction allowed under the inducement and referral rules, and how is it disclosed to the customer?
- Does the provider have its own advice arm, and who gets first call?
- What will the provider tell the customer about your firm and your fees before passing them on?
- How many referrals a month, at what pot sizes, and against what minimum?
- Who owns the customer relationship and data afterwards?
A partnership that sends you £40,000 pots when your minimum is £200,000 (an illustrative mismatch) costs you time rather than saving it.
Ignore it, for now
Keep an eye on what the big providers launch and when. Make sure your first-meeting process can handle someone who says "my pension provider suggested I look at my withdrawals". Otherwise, carry on. The regime is new, the volumes are small, and there's no evidence yet that it changes the economics of a firm advising people with six-figure pensions.
What about simplified advice?
Simplified advice is the other half of the boundary review and matters more to advice firms, because it changes what you can do rather than what providers can do. The FCA consulted in CP26/10, published 25 March 2026 and closed 22 May 2026. In its 18 September speech it said it planned a policy statement by the end of 2026. The FCA describes it as something that "can complement targeted support where a customer has straightforward needs and provide a stepping stone to more complex or holistic advice".
So the realistic sequence for a saver could become: a targeted support nudge from their provider, a simplified-advice recommendation on one question, then full advice when things get complicated (retirement, a large pot, an estate). Firms that can offer the middle step at a sensible price may pick up clients earlier in their lives. That's a strategy question for 2027, once the final rules are out.
What this means if you buy appointments
If you're paying for new client meetings, targeted support adds one question to your checklist: does this person want advice, or would a suggestion do? Someone who only wants the latter will waste your first meeting however well qualified they look on paper.
It's why that question is built into how InvestmentsBooked defines a show. Every prospect self-declares £250k–£3m in defined contribution pensions (reconfirmed on the call) and has been told that advice is paid for. The prospect asks us to book them with one FCA-authorised independent firm. We share their answers with that one firm only, and we tell them the firm's name and FRN as soon as it claims the booking, before the call. A qualified show requires that they want regulated advice, not free guidance only. If they tell you they won't pay any fee for advice, that's a disqualification and the credit comes back. Anyone who only wants free guidance is pointed to MoneyHelper and Pension Wise and never reaches your diary. The full test is on pricing and lead quality.
You pay £500 per qualified show (no VAT added), with no subscription. People book to talk about things like consolidation and retirement income, covered on pension appointments and retirement planning appointments, and the process is on how it works. All four kinds of meeting are on appointment types.
Targeted support is one of three rule changes landing on different timetables. The pension IHT changes are the ones bringing clients in now, and the pensions dashboards post covers the one that's furthest away.
Sources and checks. Rules and dates: FCA PS25/22; COBS 9B; FCA Advice Guidance Boundary Review page; FCA segment design guidance (23 March 2026). Uptake: FCA speech, 18 September 2026; Professional Adviser FOI report (1 July 2026); Royal London, Quilter, L&G and Aviva announcements (April to June 2026); Vanguard UK site. Surveys: Opinium via Financial Reporter (200 IFAs, March 2026; commissioning firm not stated); NextWealth (22 September 2026); FCA Financial Lives 2024; FCA 2025 advice firms survey. Simplified advice: FCA CP26/10. Average minimum: Dynamic Planner 2026 (research/04). Figures checked 27 September 2026. InvestmentsBooked is not authorised by the FCA and does not give financial advice.