Under its Advice Guidance Boundary Review (AGBR) initiative, the Financial Conduct Authority has introduced “targeted support”, a new regime that has become the focal point of a proposed “continuum of support” being developed through the AGBR. It is expected targeted support will be a significant initiative in addressing the UK’s ongoing and persistent “advice gap” in retail financial services. The purpose of this paper is to set out the regulatory framework for targeted support and consider the issues facing its successful delivery.
Twenty semi-structured interviews were conducted with a range of senior industry experts from fintechs, large platforms and financial services providers, industry bodies and independent financial advice firms.
This research finds that targeted support is considered an innovative approach to addressing the advice gap, and one which most in the financial services sector view positively. However, its implementation is not without challenges, including potential difficulties in processing or obtaining data, managing consumer expectations and engagement, and mitigating the potential for consumer exploitation.
The paper provides a critical assessment, based on informed industry perspectives, of a new and innovative regulatory reform. It identifies key supply-side issues facing providers of targeted support as well as the demand-side issues confronting financial consumers who may be the recipients of targeted support.
