The Financial Conduct Authority has published further information and practical examples to help firms make judgements when designing consumer segments for targeted support, building on its targeted support policy statement PS25/22. The material explains how firms can structure segmentation and suitability in a way that supports “ready-made suggestions” without straying into a comprehensive assessment akin to investment advice, and notes that the Financial Ombudsman Service will take this publication into account when determining what is fair and reasonable in complaints about targeted support. The guidance reiterates that a consumer segment should reflect a shared financial support need or objective and, where relevant, common characteristics that include both including and excluding characteristics. Segments must be granular enough to assess whether a ready-made suggestion would be suitable for an individual in the segment, but not so detailed that an investment adviser would reasonably associate them with a comprehensive consideration of a consumer’s circumstances. Examples illustrate where specifying data such as partner income, mortgage repayment costs, or potential inheritance windfalls would likely go beyond what is necessary, while approaches such as using approximate pension value or age bands can provide sufficient granularity. On information a firm already holds, it highlights the requirement not to give a ready-made suggestion where the firm is, or ought reasonably to be, aware of information indicating it may not be suitable, while also stating firms are not expected to consider all data they hold or undertake detailed searches or transaction analytics; firms should focus on what is readily accessible to the business area providing targeted support, avoid inappropriate ring-fencing, and consider disclosures to manage customer expectations about what information was not considered. The publication also addresses the use of assumptions, emphasising they must be reasonable and evidence-based and cannot be material to suitability for the segment. The Financial Conduct Authority also signposts its pre-application support service as available for firms developing targeted support propositions.

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