The Association of British Insurers has called on the Financial Conduct Authority to sharpen its incoming targeted support rules, saying firms need clarity to roll out the service with confidence.
Targeted support is billed as a step change in how financial services firms can help customers.
Authorised providers will be able to offer “ready-made suggestions” to guide people through complex pension and investment decisions.
ABI said it supports the FCA’s flexible approach and the proposed redress framework if standards are not met. But it stressed that vague expectations could limit adoption.
Its response set out four priorities.
- First, keep targeted support as a point-in-time service, not an ongoing advice relationship. Monitoring outcomes beyond delivery risks turning it into something the FCA doesn’t intend.
- Second, firms need language in the rules that matches across legislation. ABI suggested “better position” rather than “better outcome” to describe the regulator’s goal, and removal of extra rules on handling customer data that inflate cost and complexity.
- Third, firms need clear guidance on customer segmentation. Overly cautious restrictions on how groups are defined could blunt effectiveness, even when more granular data use might improve results. ABI wants regulators to work with industry on practical case studies that could be published as guidance alongside the final rules.
- Fourth, the trade body wants signposting to annuity brokerages included in the rules, giving customers wider choice to secure competitive rates.
ABI also pointed to the need for aligned regulation around communication.
Updates to ICO’s direct marketing guidance and the Privacy and Electronic Communications Regulations are needed, it argued, so that ready-made suggestions sent via email or in-app aren’t misclassified as marketing.
George Ritchie, ABI’s long-term savings policy manager, said targeted support could be a “major leap forward” in closing the advice gap, but warned that uncertainty around monitoring, segmentation, and data handling could hold it back. He added that clarity would give firms the confidence to deliver at scale.
We support the FCA’s continued exploration of the financial advice and guidance landscape and the regulator’s focus on supporting more people with complex financial decisions. While no single solution will entirely close the advice gap, targeted support is a major leap forward.
George Ritchie, Long-Term Savings Policy Manager at the ABI
“But to ensure that targeted support becomes the mass-market intervention envisaged by the FCA, changes are needed to tackle remaining regulatory uncertainty around ongoing monitoring of outcomes, treatment of additional customer information, and customer segmentation. Clarity is key to give firms the necessary confidence to start offering this novel form of support to customers,” George Ritchie said.
The FCA is expected to publish a final policy statement in December, with a full consultation on simplified advice planned for early 2026.
“As we build up to the final policy statement expected in December, we’ll continue to work closely with FCA, HMT, FOS, MaPS and consumer groups to help shape final rules.”
