FCA “very confident” that the industry will get more comfort on the FOS as Targeted Support launch gathers pace

Speaking yesterday at Boring Money’s 2025 conference - Change and Growth 2025 – Nike Trost, Head of Department - Asset Management and Pensions Policy at the FCA, has highlighted some key areas which the regulator is considering, in light of over 100 industry responses to the recent consultation paper on Targeted Support and the Advice Guidance Boundary Review.

These include the use of AI in delivering targeted support, whether annuities might be in scope and their expectations about how much data firms might use before straying into simplified or personalised advice.

The conference chair and Boring Money CEO Holly Mackay also raised the key issue of the Financial Ombudsman. “It’s a real roadblock for some firms we’re talking to when they’re thinking about Targeted Support…how confident do you feel that you will be able to give firms confidence on this issue by April next year?”

Ms Trost replied, “I feel really confident about that. We’ve worked really, really closely with the FOS, and we know, and the FOS knows, that firms want certainty around this.

“We're not going to be able to give absolute certainty on every point, but the kind of broad framework, how we will work together, how FOS will look at certain things. I'm very confident that we will get there. And we've had really constructive discussions with the FOS and the industry as well.”

Retrospective Regulation and Forbearance

Ms Mackay also asked about retrospective regulation and whether the FCA accepted that almost inevitably first iterations of Targeted Support would be sub-optimal.

Ms Trost said, ”I think what we will see is most firms evolving their proposition over time…it might be that you only start with simpler journeys. Then I also imagine that some firms will learn from what they’ve heard from customers or what their perceived customers do as targeted support evolves.

“And I think it’s really important that we get to a place where everyone can have confidence that just because you learn something and so you’ve evolved the journey, we’re not going to retrospectively judge you and say that the previous journey was wrong.”

She continued, ”But clearly, at the point you launch, a certain bar has to be met and we will certainly expect to challenge that at the authorisation gateway…a really important part for us is how have you communicated this to the end customer and how have you tested that?”

Commenting at the conference, event chair Holly Mackay, Founder and CEO of Boring Money said, “Targeted Support has the potential to be the biggest game changer we have seen in a decade. Our research suggests it could potentially lift up to 5.9 million UK adults out of the Advice Gap. But in order to get firms over the starting line, they will seek more comfort. What I heard today on the FOS question gave me more confidence that real progress is being made here”.