The Financial Conduct Authority has published Policy Statement PS25/22 with near-final rules for a new targeted support regime aimed at improving consumers’ access to help with pensions and investment decisions. The framework would allow firms to provide ready-made suggestions and direct consumers to products or actions using pre-defined consumer segments, rather than a comprehensive individual assessment, with the Consumer Duty underpinning the service. The rules set requirements for designing and delivering targeted support, including how firms define situations and consumer segments and specify suitable ready-made suggestions, alongside disclosure and record-keeping expectations. Key refinements include shifting the purpose statement language to “better position”, a new boundary rule to prevent segments being designed with a level of detail associated with comprehensive advice, and a requirement to label the service as “Targeted Support” when giving a ready-made suggestion. The FCA maintains restrictions on recommending pension consolidation and on including products subject to retail marketing or distribution limits. For annuities, firms may recommend annuities only at a feature or access-method level, must not provide quotes, and must direct consumers to MoneyHelper’s annuity comparison tool, while being able to direct consumers to whole-of-market annuity brokerages only after the targeted support interaction ends. On charging, the package includes a broad ban on third-party commissions and benefits, narrowed to allow certain intra-group cost recovery, and an exception for referral payments from annuity brokerages, plus a new disclosure requirement where product charges differ depending on whether the product is accessed via targeted support. The statement also covers authorisation expectations, a GBP 500,000 minimum capital requirement for firms providing targeted support, and the intended application of the Financial Ombudsman Service compulsory jurisdiction and Financial Services Compensation Scheme coverage, supported by joint statements with the Information Commissioner’s Office and the Financial Ombudsman Service on direct marketing and complaints. The FCA expects the final rules to take effect from 6 April 2026, subject to Government legislation making targeted support a new specified activity, and aims to open an application gateway in March 2026. Certain pensions signposting expectations are deferred by 12 months and are set to apply from April 2027, and the FCA plans a post-implementation review within two years of the gateway opening.
Financial Conduct Authority 2025-12-11
Financial Conduct Authority publishes near-final targeted support rules for group-based pensions and investment recommendations
The Financial Conduct Authority (FCA) issued Policy Statement PS25/22, detailing near-final rules for a new support regime to enhance consumer access to pension and investment advice. The framework allows firms to offer suggestions based on pre-defined consumer segments, with restrictions on pension consolidation and specific annuity recommendations. It includes a GBP 500,000 minimum capital requirement for firms, a ban on third-party commissions, and outlines authorisation expectations, with final rules expected from April 2026.