Here comes Targeted Support: The compliance view - where are the bear traps?

At the Boring Money 2025 Annual Conference on 10th September, we heard an animated and practical discussion on the risks to providers of being some of the first to deliver Targeted Support in 2026, given the uncertainties and question marks which we still face.

The session, featuring Robbie Constance, Head of Wealth Management Regulatory, DWF Law and Michael Lawrence, Consulting Lead, Ocorian, was all about identifying the bear traps: in other words, the compliance risks and operational challenges associated with the FCA’s Targeted Support proposals.

Regulatory uncertainty and ‘bear traps’

The panel highlighted ongoing uncertainty around the regulatory perimeter, especially distinguishing between guidance, targeted support, and regulated advice. There are concerns about legal certainty, liability risks, and the potential for firms or influencers to exploit regulatory grey areas. Michael reminded us that Targeted Support will be carved out as a “designated island within what would otherwise be advice”.

The FCA’s introduction of new regulated activities and permissions was discussed, with warnings about the risks of unregulated propositions and the need for firms to avoid crossing compliance boundaries. Robbie warned of legal and liability risks if firms cross these lines and stray into advice, especially as new regulated activities and permissions are introduced, referencing COBS rules and the suitability of recommendations. He also flagged the implications of finfluencers and this new strand of largely unregulated ‘advice’ (or help) on younger and less experienced investors.

As Robbie said, “What is in and out of Targeted Support? The regulator is bringing in a new permission and there will always be a risk that unregulated parties try to come in [….] there is good work going on with finfluencers [ …] people need to be careful about who they are following and using for research and make sure that those finfluencers aren’t crossing those lines and/or being inappropriately renumerated.”

For anyone wondering, Robbie confirmed that “The FCA is saying that this will amount to a personal recommendation as currently described and therefore would be a regulated advice activity.”

Michael touched on the boundary and the new permission sitting within advice, which is Targeted Support, but he also observed that this boundary is much more permissive – “you’re going to be able to do the thing you’ve always wanted to do in order to drive better customer outcomes. So, I believe the challenges are more about making sure the criteria you are using are right and don’t try to stretch Targeted Support too far.

One other bit that gives me concern is that this is a very permissive and flexible regime [...] you need to make sure your segments are granular enough and that when you’re matching your customers to segments, the amount of information is not so much that it becomes advice.”

Disclosures and service articulation

As Boring Money works with more clients to help them to deliver Targeted Support, we are being asked for help to ensure that consumers understand what Targeted Support is – but just as importantly, what it isn’t. What disclosures will be understood and where should they fit in a journey

Implementation challenges

There are significant technical and operational challenges in implementing Targeted Support. Of those, data and inclusionary and exclusionary characteristics emerged as some of the biggest in both our compliance and provider panels. How much data is too little to be helpful, and how much data is too much, leading firms into advice territory? This is referred to by some as the ‘Goldilocks’ question and is causing headaches for many. (Readers may like to read our summary of the FCA’s talk, as Nike Trost touched on this question in some detail.)

Robbie flagged, “Testing and assessment is going to be hugely challenging – how do you verify the suitability and that the outcome for the customer is aligned to the segment and the ready-made suggestion?”

Despite these challenges (and there was a fairly long list!), conference chair Holly Mackay observed, “What is different this time is the political will to make this happen.” She felt that the momentum was greater than it has ever been in this space, although firms remain nervous about delivery, and many will choose to start with ‘lighter touch’ journeys.

Data and electronic communication

Our speakers acknowledged that larger institutions have advantages due to data access and distribution channels, but must carefully manage data privacy and compliance, and will need to be wary of multiplicity of segments. (Discussions around the complexities of electronic communications law, or ‘PECR’, were had with the regulator and can be read in this summary.) Our inference from the regulator’s speech was that firms might have more comfort around FOS questions being resolved than they might about the PECR questions.

Customer understanding and communication

Our speakers pressed the importance of clear communication to ensure customers understand the nature and limitations of targeted support, and do not confuse it with advice or guidance. Past failures with simplified advice were attributed to inconsistent terminology and confusion; the panel stressed the need for clarity for the consumer, and for the media’s understanding and buy-in. From a practical perspective, this means effective customer journeys to avoid repeating these mistakes.

ML noted, “[Targeted Support] is not an island – it exists in the broader customer journey, now and in the future. It is not a microtransaction, although it can be.” The speakers referenced the need for Support to be agile, and the ability of firms to zoom in and helicopter out as required.

The reverse was also cited as a potential threat – while firms need to be aware of information, “[advisers] cannot unhear” that which would count as too much information, veering firms into the advice sphere. Sensitivity to the tension between the two sides of the coin and the need to strike the right balance is critical.

Michael stressed the need to match the support to the solution – and continual need to monitor in case intervention is required, for example, if a customer disinvests immediately, signalling poor understanding of the long-term nature of investing.

Opportunities for larger institutions

Our speakers acknowledged that larger institutions have advantages due to data access and distribution channels, which will allow them to proactively engage customers and offer personalised support. However, the real watch-out here is that they must carefully manage data privacy and compliance, and that their larger size will require increased compliance and monitoring obligations.

In summary

While Targeted Support offers a significant opportunity to improve customer outcomes, it comes with real regulatory and operational risks. As discussed by our speakers, the blurred lines between guidance, support, and advice mean firms must tread carefully to avoid liability and stay within the FCA’s evolving boundaries. Clear customer communication, robust governance, considered judgement and ongoing monitoring will be essential.

Aside from the issues around FOS and PECR, key challenges for the industry centre around the use of data, the management of segments and characteristics and ensuring that customers understand what Targeted Support is. As well as what it isn’t!