The Financial Conduct Authority (FCA) has on Friday published its latest consultation paper (CP25/26), opening the door for adviser firms to charge consumers for “targeted support”. This new category of regulated activity is pitched as a middle ground between full financial advice and generic guidance, aimed at helping millions of people who may not be able to afford full advice but still need some support.
From as early as next spring, firms may be allowed to offer targeted support for a fee, with the FCA confirming it will permit a mix of charging structures, including explicit consumer fees and cross-subsidisation from other revenue streams.
The FCA says this is about closing the “advice gap” – the millions who currently go without guidance on pensions, investments, and other financial decisions. But the question remains:
Will consumers really pay?
From our experience, consumers are reluctant to pay for being sold to. Financial planning in the UK has long been entwined with product intermediation. Historically, much of this “guidance” has been provided free of charge – with the costs recovered via product sales and commissions.
That leaves today’s consumer with a difficult calculation: why pay for something that used to be free, particularly if the outcome still funnels them toward a product sale?
Has technology already overtaken this idea?
There’s a deeper issue here. The FCA is consulting on a framework designed for a pre-AI world. But in 2025, technology has made financial knowledge and support more widely available than ever before.
- AI-driven tools now provide personalised insights at low or no cost.
- Communities and open-source platforms are democratising financial education.
- Consumers increasingly expect empowerment, not intermediation.
If affordable, accessible technology is already delivering targeted support at scale, is the FCA’s proposal already redundant?
Risk of wasted consumer money
If the policy is misaligned with how people now consume information and make financial decisions, then the regulatory machinery risks channeling millions into building structures that may never be used.
And make no mistake – these costs are never absorbed by firms alone. They are ultimately charged back to the consumer, one way or another.
You decide
The FCA’s consultation is open until 17 October 2025, with final rules expected in December. But the bigger question is not just how to regulate targeted support, but whether this whole approach is fit for purpose in the age of AI.
- Are consumers really going to pay for what they once received for free?
- Is targeted support just old wine in new bottles – financial product sales with a thin wrapper?
- Or should we be rethinking support entirely, focusing on empowerment, technology, and transparency instead of more complex regulatory categories?
If technology has already overtaken this model, then the FCA may be propping up a system that doesn’t reflect consumer reality. That could mean wasted resources, higher costs, and missed opportunities to build something better.
The consultation invites your comments – but perhaps the real debate should be about whether this is even the right question to be asking anymore.
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The fact that only a bank and a life insurer have shown interest in targeted support so far tells us something important: this isn’t about empowering consumers, it’s about protecting distribution channels.
Banks and insurers benefit when “support” is a funnel to their own products. Independent advisers, on the other hand, seem unconvinced – and for good reason. Consumers are unlikely to pay for what looks like thinly veiled sales.
Meanwhile, technology already offers personalised insights and decision support at scale, often free of charge. If the only players keen to take up targeted support are institutions with products to sell, then we risk building a regulatory framework that entrenches the very behaviours it claims to solve.
That’s not empowerment – it’s old wine in new bottles.
I can’t see advice firms offering targeted support. Crucially, many smaller firms will be unable to offer targeted support due to the £500,000 minimum capital requirement to operate within the framework.