Posted on by Sheena Gillett

13 February 2025

Targeted support is a welcome intervention but needs to sufficiently delineate itself from advice

PIMFA urges the FCA to ensure that the value of financial advice remains obvious to consumers and the boundary is not further blurred 

PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry, has called on the Financial Conduct Authority (FCA) to ensure that in progressing its targeted support reforms, the attractiveness of mass market financial advice is preserved.

In its response to the consultation paper ‘Advice Guidance Boundary Review – proposed targeted support regime for pensions’, PIMFA has argued that whilst it is right that targeted support should be able to provide what is currently tantamount to a personal recommendation, it cannot go so far as to confuse consumers about the type of service they are receiving or diminish the attractiveness of financial advice.

PIMFA has called on the Regulator to ensure that certain protections are embedded within the regime to ensure that targeted support is sufficiently distinguished from holistic advice. It has identified three areas for focus here, namely:

1. How suggestions are communicated to the consumer,
2. How information is collected to assign a consumer to a relevant segment and, where possible,
3. Ensuring that the consumer is presented with a restricted set of options when they are being encouraged to make a transaction.

Simon Harrington, Head of Public Affairs at PIMFA, commented:

“Targeted support can be genuinely transformational. There is a very obvious support gap which exists in the pensions space in particular which we think targeted support can fill assuming – and it is a big assumption – that consumers are willing to engage with it’.

‘But we remain somewhat frustrated with the focus of the FCA’s proposals, given that they appear to see the primary utility of targeted support as a method to help consumers buy different products rather than as a method to help them get better outcomes out of the ones they already own. By making targeted support transactional it risks blurring the boundary between advice and the new regime in
an unhelpful manner.

‘We are comfortable with targeted support being able to provide what is currently tantamount to a personal recommendation, and we are comfortable with it being transactional, but the focus of the suggestions provided need to be focused on what a consumer could do, rather than being presented as something which they should do. As it brings forward its rules at the next stage, we have encouraged the FCA to think about how they can adequately delineate targeted support from financial advice. We believe that firms should have flexibility to design and deliver targeted support journeys which they think will benefit their customers most, but there need to be clear and unambiguous parameters in which these firms operate in as well as in how they communicate and disclose this service to consumers.”

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NOTES TO EDITORS

About PIMFA – the Personal Investment Management & Financial Advice Association

  • PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
  • The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
  • PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
  • PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
  • PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
  • Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk,
+44 (0)20 7011 9869 / +44 (0)7979 493225.