The FCA is consulting on making changes to its rulebook to support its targeted support proposals.
In a previous consultation paper, the UK regulator proposed a framework for targeted support to help consumers manage their finances.
On the back of the consultation (CP25/17), which closed at the end of August, the FCA has identified three areas of the Handbook that need to be reviewed to ensure targeted support proposals work effectively.
The review includes:
- Ensuring the proposed targeted support framework interacts effectively with existing rules, such as those relating to pensions choices.
- Refining some of the proposals set out in CP25/17, such as those around commissions and charging.
- Ensuring the proposed new targeted support activity aligns with the wider regulatory framework, such as reporting requirements.
Aegon’s Steven Cameron has also noted a new proposal for firms to signpost to targeted support from the time the authorisation gateway opens in March, which he says is premature.
The pensions director said: “While over time, it’s sensible to make consumers aware of all support options available, signposting from as early as March next year could well backfire.”
Firms will have the option of offering their own targeted support, or directing customers to information about targeted support on the MoneyHelper website.
“Firms will currently be considering whether to offer targeted support, and if so, in which situations. They then need to obtain permissions. This means, initially, we’re likely to see targeted support offered by a relatively small number of firms in some simpler situations, with this hopefully expanding across more firms and situations over the coming year or years.
Cameron added: “A blanket signposting to targeted support in the likes of pension yearly statements from next March could simply confuse customers if they then find their pension provider doesn’t offer it and they can’t access it elsewhere.”
He also warned clients may expect targeted support to help in situations such as pensions consolidation, which the FCA has currently ruled out, if this is not carefully explained to them.
“Aegon believes that targeted support can be a valuable service, providing it complements and doesn’t cannibalise full financial advice.
“But it could confuse and frustrate customers if the FCA requires signposting ahead of when targeted support has ‘bedded in’ and become more generally available.”
The latest consultation will run until 17 October 2025.
