The FCA’s new “targeted support” regime launches in April 2026, promising to help millions of investors stuck between free guidance and full financial advice. But what is it, how does it differ from proper advice, and how do you know which one you need?
You’re unwell. Not emergency-room unwell, but not “take a paracetamol and get on with it” unwell either. Do you call 111? Book an appointment with a GP? Go to a walk-in centre? The NHS has multiple tiers of help, and knowing which one you need is surprisingly difficult. Choose the wrong option and you waste hours on something that can’t help you, or miss something serious because you didn’t get proper expertise.
Getting help with your money is just as bewildering. Perhaps more so.
Guidance. Targeted support. Simplified advice. Regulated advice. The words sound interchangeable. They’re not. Understanding the difference matters, because the help you receive, and the protection you’re entitled to if things go wrong, depends entirely on which tier you’re in.
If you’ve ever felt stuck in no-man’s land with your finances, you’re not imagining it. You’ve got some money to invest. You know you should probably do something with it. But you’re not wealthy enough to feel like “proper” advice is for you, and not confident enough to pick a fund and hope for the best.
According to the FCA’s policy statement on targeted support, around 23 million UK consumers are “underserved” by the current system.
The regulator knows this. That’s why it’s changing the rules. But before you can benefit, you need to understand what those changes mean.
Why millions are stuck in no-man’s land
The advice gap isn’t a vague industry talking point. It’s measurable. The numbers are stark.
Only 9% of UK adults received regulated financial advice in the 12 months to May 2024, according to the FCA’s Financial Lives survey. More than nine in ten people are navigating pensions, investments, and retirement decisions without professional help.
Where does everyone else turn? Largely to the internet, and particularly social media. Among investors aged 18 to 34, 45% used social media to research investing. TikTok and Instagram have become de facto financial advisers for a generation.
The consequences show up in behaviour. Some 7 million adults have £10,000 or more sitting in cash savings but aren’t investing any of it. Among those with £10,000 or more in investable assets, 61% hold at least three-quarters in cash. For many, that’s rational. For others, it’s a slow erosion of purchasing power they don’t fully understand.
Pensions tell a similar story. Three-quarters of people with defined contribution pensions aged 45 and over don’t have a clear plan for accessing their money. Meanwhile, 12.5 million people are under-saving for retirement.
The UK lags internationally too. British households allocate 19% of their financial assets to retail investments, compared to 38% in the EU and 56% in the United States.
This isn’t a niche problem. It’s systemic.
How we got here
The advice gap didn’t happen by accident. It’s the unintended consequence of well-meaning regulation.
The Retail Distribution Review in 2012 banned commission payments to advisers and raised qualification standards. Both changes improved advice quality. They also increased costs. Advisers could no longer be paid by product providers, so clients had to pay directly. Higher qualifications meant higher salaries. The economics of serving smaller clients stopped working.
Then came the Consumer Duty in 2023. It raised standards further, requiring firms to demonstrate they’re delivering good outcomes for clients. A sensible goal. But the compliance burden made serving people with modest portfolios even less viable.
The result? Almost half of UK advice firms now have a minimum threshold for new clients, with £100,000 to £150,000 the most common requirement. If you have less, many firms won’t take you on.
Something else happened too. Firms became nervous about giving any specific help in case it crossed the invisible line into regulated advice. The safest option? Say nothing useful. Generic guidance carries no regulatory risk.
Imagine if GPs could only see patients with serious conditions, because the paperwork for minor ailments wasn’t worth the hassle. Everyone else would be stuck calling 111 and hoping for the best.
That’s roughly where we are with money.
What targeted support means
Targeted support is a new category of regulated help that sits between generic guidance and full financial advice. It launches in April 2026, designed to fill the gap.
To understand where it fits, think about healthcare again.
Guidance is like the NHS website. General information about conditions and treatments. Useful for orientation, but not tailored to you. No one examines your situation. No one tells you what to do.
Targeted support is more like a pharmacy consultation. The pharmacist asks a few questions about your symptoms, then suggests a treatment that works for people like you. They haven’t examined you in depth. They’re matching your described situation to a likely solution.
Simplified advice (coming later, probably later this year or next) is closer to a GP appointment. Someone assesses your individual situation, but for a single, specific need rather than your whole health picture.
Full regulated advice is the consultant specialist. Comprehensive assessment. Ongoing relationship. Handles complexity. Maximum expertise and protection.
So what does targeted support involve?
Firms identify groups of consumers who share similar characteristics and needs. The FCA calls these “consumer segments”. They design “ready-made suggestions” suitable for people in that segment.
If you fit the segment, you get the suggestion.
For example: “People aged 55 to 65 with £50,000 or more in cash who haven’t started drawing their pension might benefit from investing in a diversified fund.”
Here’s the critical distinction. The suggestion is personal, directed at you. But it isn’t personalised, based on a comprehensive assessment of your individual circumstances. The FCA’s policy statement makes this explicit: “While the recommendations firms make will be personal to the consumer, they will not involve a comprehensive consideration of that consumer’s characteristics or circumstances.”
That’s not a criticism. It’s what targeted support is designed to be.
Targeted support in practice
Banks, investment platforms, and pension providers will be first to offer targeted support. They have the customer data, the technology, and the scale to make it work.
What might it look like?
The FCA’s policy statement gives concrete examples. A firm might suggest you invest excess cash sitting idle in your account. It could recommend a more sustainable withdrawal rate if you’re drawing down your pension too quickly. It might point you toward a specific fund that fits your segment, or steer you away from holding too much cash inside a pension wrapper.
Most of this will happen digitally. Expect prompts when you log into your pension account. Nudges on your banking app. Suggestions embedded in the customer journey when you’re already making a decision.
Some firms will charge for targeted support. Many won’t. The FCA expects cross-subsidisation to be common, with firms absorbing the cost because targeted support keeps customers engaged and assets on their platform. Commissions will still be banned.
What about protection if things go wrong?
Targeted support is a regulated activity. Firms must apply for permission to offer it, and they need at least £500,000 in regulatory capital. If a firm fails, you’re covered by the Financial Services Compensation Scheme. If you have a complaint, the Financial Ombudsman Service can hear it.
But the standard for assessing complaints differs from full advice. With proper advice, suitability is judged against your individual circumstances. With targeted support, it’s judged against whether the suggestion was reasonable for people in your segment.
That distinction matters.
When targeted support isn’t enough
Targeted support works for straightforward situations. A single, clear question. A simple need. But financial lives are rarely that tidy.
A pharmacy consultation is fine for a minor ailment. If you have multiple conditions, or something serious, you need the GP or the specialist. The same logic applies to money.
Consider what targeted support cannot do.
It addresses one need at a time. Your pension decision might affect your inheritance tax position. Your ISA strategy might depend on whether you’ve maxed out pension contributions. A decision about taking a lump sum could trigger a tax bill that wipes out the benefit. Targeted support won’t connect these dots. Proper financial planning looks at the whole picture.
The design is group-level, not individual. A suggestion that’s reasonable for your segment might be wrong for your particular circumstances. Perhaps you have a defined benefit pension that changes the calculus. Perhaps you’re planning to move abroad. Perhaps your health means longevity assumptions don’t apply.
There’s no ongoing relationship either. You get a suggestion, act on it or don’t, and that’s the end of it. Nobody checks in as your circumstances change. Nobody to call when markets fall 20% and you’re wondering whether to sell everything.
The biggest risk to your wealth isn’t picking the wrong fund. It’s panicking when markets drop and selling at the bottom. An adviser who knows you can talk you through volatile periods. An algorithm can’t.
Certain situations almost always warrant proper advice. Multiple pensions, especially as you approach retirement. Retirement planning itself, with its drawdown decisions, tax-efficient income strategies, and sequence risk. Business ownership, with its exit planning and pension funding opportunities. Inheritance tax planning, whether you’re receiving wealth or hoping to pass it on. Divorce or bereavement, where financial and emotional complexity collide.
If any of these apply, targeted support almost certainly isn’t enough.
How to decide which help you need
A quick self-assessment can help you work out where you stand.
Targeted support might work if your situation is straightforward. You have a single, clear question. Should I invest this cash? Which fund makes sense for my ISA? You’re comfortable making your own decisions once someone points you in a direction. And you understand you’re getting a suggestion designed for people like you, not a plan built around your specific circumstances.
You probably need proper advice if there’s complexity anywhere in your financial life. Multiple pensions. Approaching or already in retirement. Business ownership. Inheritance, either receiving one or planning to leave one. Any situation where decisions are high-stakes or hard to reverse.
But there’s a simpler test.
If you’re unsure which type of help you need, that uncertainty is itself a signal. Targeted support works best for people who already know their question. If you’re not sure what questions to ask, a conversation with a proper adviser is worth more than a ready-made suggestion.
The FCA envisions targeted support as a stepping stone. Some people will start there, realise their situation is more complex than they thought, and move to full advice. Whether firms design their services to facilitate that journey remains to be seen. The commercial incentive is to keep you on the platform, not refer you elsewhere.
Taking the next step
Knowing which tier of help you need is half the battle. Before reading this, you might have assumed “advice” meant anyone telling you what to do with your money. Now you know the distinction between guidance, targeted support, and regulated advice isn’t semantics. It determines how personalised the help is, how your situation gets assessed, and what protection you have if things go wrong.
Targeted support is genuine progress. For the millions getting nothing, something meaningful is better. When it launches in April 2026, more people will get useful prompts about their pensions and investments than ever before.
But it’s not a substitute for proper advice when your life has complexity. And most lives do, eventually. Pensions accumulate. Retirement approaches. Parents age. Businesses grow. Straightforward questions become tangled ones.
You don’t need to navigate that alone.
If you’re unsure whether your situation calls for targeted support or something more comprehensive, a conversation costs nothing. At rockwealth, we offer a free consultation to help you understand where you stand and what kind of help would make a difference. So why not book a discovery session today?
IFA and Financial Adviser in the Lake District, Cumbria
rockwealth Lake District is an evidence-based and fixed-fee Independent Financial Adviser situated in the Lake District.Interested to work with us?: Begin your financial journey with us through an Initial Discovery Consultation, completely free of charge and without any obligation.
Discover us at: rockwealth Lake District, Victoria Hall, High Sand Lane, Cockermouth, CA13 9NA.