Industry experts have welcomed the news that the Financial Conduct Authority (FCA) has finalised the rules for the targeted support regime, branding the new framework a significant step forward in efforts to close the advice gap and empower savers.

The FCA has today (11 December) confirmed the 'near-final' rules for the new targeted support regime, estimating that at least 18 million people are expected to benefit from extra help with their investments and pensions as a result.

Association of British Insurers director of long-term savings policy, Yvonne Braun, welcomed this, suggesting that the new framework has the potential to make a real difference to people’s financial lives.

"At a time when only 9 per cent of people take regulated advice, targeted support will give people help they can rely on when making complex financial decisions," she stated.

"The FCA’s new rules mark a significant step towards closing the advice gap and will empower millions.”  

This was echoed by Standard Life Centre for Future of Retirement head of public engagement and campaigns, Cath Sermon, who described this as a "positive step" that will help ensure that savers don’t feel overwhelmed when making decisions around their pensions.

The Platforms Association also welcomed the introduction of targeted support, with its chief executive, Keith Phillips, arguing that the previous system was "far too prescriptive, with disclosure templates that people really struggled to engage with".

The FCA has shared the rules ahead of the final legislation being passed in order to give providers as much time as possible to prepare, having already confirmed that it will open the gateway service from March to ensure that providers are ready once the legislation is in place.

Firms are already engaging with this, as Legal & General DC and workplace savings CEO, Paula Llewellyn, confirmed that the group was "among the first firms to engage with the FCA’s pre-application process for targeted support because we see enormous potential for this reform to close the advice gap and transform the financial behaviours of the UK, such as building a more robust investment culture".
 
“Targeted support will play a vital role in improving retirement outcomes by inspiring better-informed, long-term financial decisions," she said.

Adding to this, Scottish Widows chief executive, Chira Barua, said: "Targeted support could help firms like Scottish Widows to provide timely, tailored guidance for customers with common needs.

"We’re working with the FCA’s AI Live Testing service now, so we’re ready to bring technology and insight to help customers make confident, informed decisions," he added.

However, the next steps are expected to be crucial, as Investment Association chief executive, Chris Cummings, clarified that "regulatory reform is critical, but just the first step", emphasising that financial firms must now consider actions to close the financial advice engagement gap, particularly for those approaching retirement.

Broadstone head of policy, David Brooks, also warned that whilst targeted support has the potential to close one of the most persistent gaps in the UK pensions and investment system, execution will be key to the success of this initiative.
 
"Firms will need absolute clarity on the advice/guidance boundary to support complex decision making and to ensure that targeted support does not create new risks or uncertainty," he stated.

"Trustees of occupational schemes would be wise to keep abreast of targeted support developments as it is likely that it will apply to the communications and support that they deliver to members.” 

This was echoed by EY UK life, pensions and personal lines leader, Alistair Brannan, who said: “More work is required as firms consider their targeted support solutions, and how quickly they can be brought to market. 
 
“Regulation is just the first step. These final rules may not be mandatory, but they are designed to respond to longstanding calls from industry for greater flexibility to better support their customers.

"The onus is now on providers across the banking, wealth and retirement sectors to consider how to respond."

St James's Place director of public policy, James Heal, agreed, arguing that while the final rules for targeted support are an "important piece in the puzzle" of support, giving people the confidence they need to start investing if they don’t receive advice is "a tough challenge that won’t be fixed by a single measure".
 
"We now also need a new regime for simplified advice to enable a new market for both the demand and supply of a focused and transactional form of advice, and look forward to engaging with the FCA further on this in 2026," he stated.

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