Targeted support is now written into UK regulation. The Treasury has made the Statutory Instrument establishing a new specified activity in the Regulated Activities Order, signed on 28 January 2026 and laid before Parliament on 30 January. The instrument splits commencement: 23 February 2026 for the FCA to make rules, give guidance and accept applications, and 6 April 2026 for everything else. The FCA has already signalled that 6 April is the operational start date for firms. Source: legislation.gov.uk; FCA PS25/22. (fca.org.uk)

What changes in practice is simple to state and important for product and digital teams. A new article 55A is added to the RAO for ‘providing targeted support’. When a firm stays within that definition it is not ‘advising on investments’ under article 53. In other words, firms can give a recommendation to an individual because they are in a clearly defined group with shared characteristics or circumstances, without it becoming a personal recommendation. Sources: FCA/AGBR materials and independent summaries. (hsfkramer.com)

Each suggestion has to be labelled properly. The rules require firms to tell customers, at the same time as the suggestion, that it isn’t based on a comprehensive review of their personal situation, isn’t specific to them, and explain the group features used to generate it. The FCA’s near‑final package also stresses clear signposting so customers understand they are not receiving tailored advice. Source: FCA policy statement and materials. (fca.org.uk)

Permissions and timing are tight. ‘Providing targeted support’ needs a Part 4A permission. The FCA plans to open the gateway in March 2026 and is offering a pre‑application support service via Connect to help firms submit complete cases. The regulator expects rules to apply from 6 April 2026, so firms aiming for ISA season should be production‑ready in Q1. Sources: FCA PS25/22, FCA press release, AGBR hub. (fca.org.uk)

Why this matters is scale. The FCA estimates around 23 million UK consumers are underserved by the current advice and guidance market. Targeted support is designed to meet common needs at lower cost - especially for pensions choices and first‑time investing - while keeping Consumer Duty standards in view. Sources: FCA PS25/22 and press release. (fca.org.uk)

A bank example brings this to life. A customer aged 32 with an emergency fund and £12,000 in easy‑access cash, no need to touch it for five years, opens their app. Because they fall into a pre‑defined group, the app presents a ready‑made ISA suggestion with a plain statement explaining why they are seeing it and that it is not tailored advice. The FCA’s policy sprint tested similar ‘cash‑to‑investment’ journeys for inexperienced investors. Source: FCA AGBR TechSprint. (fca.org.uk)

Pensions is another early win. A workplace provider segments members in their late 50s who haven’t opted out of direct marketing and are approaching drawdown. Those members receive a group‑based suggestion, alongside the mandated statement, to review whether their default fund and withdrawal plan still fit their situation. The FCA has welcomed government moves to enable more proactive communications of this kind. Source: FCA PS25/22. (fca.org.uk)

What firms need to build now is an operating model, not a pilot. Define ‘situations’, map customer segments and pre‑approve a library of suggestions, with governance to ensure segments are neither too broad nor effectively individualised. The near‑final rules sit in new COBS 9B and the policy statement runs to c.207 pages, so record‑keeping, durable‑medium communications and segment‑level outcome monitoring will matter from day one. Sources: A&O Shearman analysis; Linklaters note. (aoshearman.com)

Mind the boundary and the redress route. Customers in scope are retail clients, so Consumer Duty applies. The FCA and Financial Ombudsman Service have set out how they intend to approach targeted support, and the ICO has clarified engagement expectations. Firms still need clear escalation points into full advice and careful wording on risk warnings to avoid drift into personal recommendations. Sources: KPMG overview; FCA press release notes. (kpmg.com)

The Order also tidies the legal plumbing. RAO exclusions and other enactments are updated so targeted support is treated consistently - for example in overseas person, group and supplier contexts, and in pensions transfer regulations. That means many providers can use current distribution channels once they have the new permission, with fewer grey areas. Source: HM Treasury consultation response. (gov.uk)

Next steps are clear. The FCA plans further consultation in early 2026 on simplified advice and on consolidating advice rules, while the authorisations gateway opens in March. For boards, the call is whether to apply early and build a scaled, compliant service for April, or follow once the first movers prove the model. Sources: FCA AGBR hub and PS25/22. (fca.org.uk)