The FCA's New Targeted Support Regime Goes Live on 6 April. What Does It Mean for Your Firm?

The advice gap has been one of the UK's most stubborn financial problems for years. Millions of people have too much money to qualify for free guidance but not enough (or not enough confidence) to pay for full regulated advice. They end up doing nothing, and their money sits in cash losing value.

The FCA thinks it has a fix. From 6 April 2026, a new category of regulated activity called "targeted support" will allow authorised firms to make investment and pension recommendations to groups of consumers with similar characteristics, without going through the full individual suitability process.

It's a big deal. And whether you see it as an opportunity or a threat depends on the kind of firm you run.

What targeted support actually is

In simple terms, targeted support sits between generic guidance and full personalised advice. Firms that get permission from the FCA will be able to identify groups of consumers (say, people aged 50 to 60 with unmanaged defined contribution pensions above £50,000) and recommend suitable investment solutions designed for that group.

The key difference from traditional advice: suitability doesn't need to be assessed at the individual level. The firm needs to demonstrate that the recommendation is suitable for the segment as a whole.

This is aimed squarely at the mass market. Think of the millions of people with old workplace pensions sitting in default funds, or those with £30,000 in a savings account earning next to nothing who've never spoken to an adviser.

Who can offer it (and who can't)

Here's where it gets interesting for small DA firms.

To offer targeted support, you need a new FCA permission: "providing targeted support." If you're already authorised, that means applying for a variation of permission. The gateway opened on 2 March 2026, and the FCA has set up a pre-application support service for firms planning to apply.

But here's the catch: appointed representatives cannot deliver targeted support at launch. HM Treasury has said it will review this once broader reforms to the AR regime are in place, but for now, it's DA firms only.

That's a genuine competitive advantage. If you're a directly authorised firm, you have a head start that AR firms simply don't have access to yet. Whether you choose to offer targeted support or not, being in a position to do so is a differentiator.

Should your firm care?

If you're a small advice firm focused on high-net-worth or complex planning clients, targeted support probably isn't going to change your day-to-day business. Your clients need (and are willing to pay for) full personalised advice.

But there are a few scenarios where this matters:

You're turning away smaller clients. If you regularly have conversations that start with "I'd love to help but our minimum is..." then targeted support could give you a way to serve those people profitably. Rather than turning them away or pointing them to a generic robo-adviser, you could offer a structured solution designed for their segment.

You want to build a pipeline. Targeted support clients today could become full advice clients tomorrow. As their wealth grows (or their needs become more complex), they'll already have a relationship with your firm. That's a warmer lead than anything LinkedIn can give you.

You're thinking about scale. If your growth plan involves serving more clients without proportionally growing headcount, targeted support is designed for exactly that. The lower per-client cost of segment-based recommendations means you can serve a much larger group.

What you need to do now

If this is on your radar, here's a practical to-do list:

First, read the FCA's policy statement (PS25/22). It's long, but the executive summary gives you the key points in a few pages. Second, talk to your compliance adviser about whether a variation of permission makes sense for your firm. Third, think about which client segments you'd target. The firms that do well with this will be the ones that have a clear picture of who they're trying to help.

And even if you decide targeted support isn't for you right now, keep an eye on it. The firms that adopt it early will be building a client base that traditional-advice-only firms can't easily reach. Over time, that changes the competitive landscape.

The bigger picture

The FCA is clearly signalling where it wants the market to go: more people getting help with their money, through a wider range of regulated options. Consumer Duty already pushed firms to think about whether their clients are getting good outcomes. Targeted support takes that further by asking: what about all the people who aren't your clients yet?

For small DA firms, this is worth paying attention to. You don't need to act immediately, but understanding the regime and its implications will help you make better strategic decisions over the next 12 months.

The firms that thrive will be the ones that can serve clients efficiently at different levels of complexity, with the right tools and processes to make it work without drowning in admin. That's always been true, but targeted support makes it more true than ever.