Financial advice firms in the UK face a major operational shift. The Advice Guidance Boundary Review and the introduction of FCA-regulated targeted support means firms can serve millions of consumers with tailored financial suggestions without providing full regulated advice but only if they prepare correctly.
Targeted support can close the advice gap. It creates a middle ground between generic guidance and comprehensive advice by allowing firms to offer suggestions suited to customer segments rather than bespoke recommendations.
To implement targeted support effectively, firms must plan across technology, processes, people and compliance. The steps below provide a practical roadmap.
Understand the Regulatory Context First
Before designing systems or training staff, firms must be clear on what targeted support is — and what it is not.
Targeted support is expected to become a regulated activity following the FCA’s Advice Guidance Boundary Review. It allows firms to provide suggestions that are appropriate for defined customer segments, without undertaking full individualised advice.
This distinction has important implications:
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Firms do not need full fact-finds for every customer
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Suggestions must be suitable for groups, not individuals
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Clear boundaries and escalation rules are essential
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Robust governance and documentation are required
Preparation should begin well before final rules are published, as implementation timelines are significant.
Set a Realistic Implementation Timeline
Targeted support is not a “switch-on” capability. Firms should plan a phased approach.
A typical timeline includes:
Pre-publication groundwork
Assess current capabilities and identify gaps in technology, skills, data and compliance frameworks.
Technology and process design
System selection, integration, workflow design and documentation typically take three to six months.
Staff training
Training on regulatory boundaries, segmentation logic, systems and escalation triggers usually requires four to eight weeks.
Pilot deployment
Run a controlled pilot with a limited customer group for four to eight weeks to test segmentation, suggestions and operational resilience.
Full rollout
Gradual expansion across customer segments, products or regions with ongoing monitoring and refinement.
Most firms should expect a nine to twelve month journey from final rule publication to full operational capability.
Build the Right Technology Foundation
Technology is the backbone of targeted support delivery.
Key capabilities include:
Customer data infrastructure
Systems must support the collection, storage and analysis of customer data used for segmentation and monitoring.
Segmentation engines
Rules-based logic, statistical clustering, or hybrid approaches assign customers to appropriate segments.
Decision support tools
Technology should guide staff on suitable suggestions, required disclosures and next steps.
Compliance monitoring systems
Automated checks track segmentation accuracy, suggestion appropriateness and outcomes.
System integration
Targeted support tools must integrate with CRM, back-office platforms and document management systems to avoid duplication and errors.
AI-driven automation is particularly valuable for data extraction, segmentation, suggestion frameworks and quality assurance.
Decide Whether to Build, Buy or Partner
Firms generally choose one of three approaches:
Build
Custom solutions offer maximum control but require significant development resource and ongoing maintenance.
Buy
Specialist vendor platforms accelerate deployment and reduce risk but may limit customisation.
Partner
Hybrid approaches combine vendor technology with bespoke logic or integrations.
Evaluation should focus on regulatory alignment, UK financial services expertise, scalability, integration capability and quality of ongoing support.
Design a Robust Segmentation Methodology
Segmentation underpins everything in targeted support.
Effective segments must:
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Group customers with genuinely similar needs
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Be defensible from a regulatory perspective
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Enable standardised suggestion frameworks to work reliably
Common approaches include:
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Statistical clustering to identify natural groupings
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Rules-based segmentation aligned to policy and regulation
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Hybrid models combining data-driven insight with human governance
Segmentation should be monitored continuously, with customers reassigned when circumstances change.
Develop Compliant Suggestion Frameworks
Once segments are defined, firms must build suggestion frameworks for each group.
This includes:
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Identifying common needs within each segment
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Assessing suitable product or action options
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Embedding regulatory and policy constraints
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Creating standard explanations and disclosures
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Defining confidence thresholds and review triggers
Suggestion frameworks should be reviewed regularly as products, regulation and customer outcomes evolve.
Prepare Staff for New Ways of Working
Targeted support changes staff roles.
Training should cover:
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Regulatory boundaries and escalation criteria
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How segmentation works and why it matters
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How to explain suggestions clearly and compliantly
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System usage and quality checks
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Recognising vulnerability and complexity
Scenario-based training and role play are particularly effective for embedding good practice.
Build a Targeted Support Compliance Framework
Targeted support requires its own compliance structure.
Firms should establish:
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Governance and approval processes
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Quality assurance and outcome monitoring
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Clear documentation standards and audit trails
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Complaint handling aligned to targeted support scope
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Regulatory reporting processes
Compliance teams should be involved early to ensure frameworks are practical as well as robust.
Identify and Manage Implementation Risks
Key risks include:
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Incorrect customer segmentation
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Inappropriate suggestions for certain groups
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Technology failures or data issues
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Staff misunderstanding regulatory boundaries
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Reputational damage if expectations are unclear
Risk management plans, escalation protocols and professional indemnity arrangements should reflect these exposures.
Align Targeted Support With Business Strategy
Targeted support should sit within a broader service model.
Firms should define:
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How targeted support fits alongside advice and guidance
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Clear referral pathways between service levels
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Pricing and profitability assumptions
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Volume requirements to achieve scale benefits
For many firms, profitability emerges once customer volumes reach a few thousand per year.
Use Pilot Programmes to Learn Before Scaling
Pilot programmes allow firms to:
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Validate segmentation logic
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Test suggestion frameworks
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Stress-test systems and workflows
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Gather early outcome and satisfaction data
Pilots should have clear success measures covering compliance, customer experience and operational efficiency.
Communicate Clearly With Customers
Customer communication is critical to success.
Firms should explain:
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What targeted support offers
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What it does not replace
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Who it is suitable for
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How customers can progress to full advice if needed
Clear communication builds trust and reduces regulatory and reputational risk.
Final Thoughts
Targeted support represents a significant opportunity for advice firms to serve more consumers sustainably, compliantly and profitably.
However, success depends on preparation. Firms that invest early in the right technology, governance, people and processes will be best placed to deliver high-quality targeted support at scale when the regulatory framework is finalised.
Frequently Asked Questions
What is targeted support in UK financial advice?
Targeted support is a regulated financial service that allows firms to provide appropriate suggestions to groups of customers with similar needs, without delivering full individualised financial advice. It sits between generic guidance and regulated advice and is being developed following the FCA’s Advice Guidance Boundary Review.
How is targeted support different from regulated financial advice?
Targeted support differs from regulated advice because it does not involve personalised recommendations based on a full individual fact-find. Instead, suggestions are designed for defined customer segments and must remain within regulatory boundaries set by the FCA.
When will targeted support become a regulated activity?
Targeted support is expected to become a regulated activity once final rules from the FCA’s Advice Guidance Boundary Review are published. Firms should prepare in advance, as implementation typically takes several months.
Do advice firms need full fact-finds to deliver targeted support?
No. Targeted support does not require a full individual fact-find. Firms must collect sufficient information to assign customers to appropriate segments, but not to the level required for personalised regulated advice.
What technology is required to deliver targeted support?
Firms typically require customer data infrastructure, segmentation engines, decision support tools, compliance monitoring systems, and integration with existing CRM and back-office platforms. AI is commonly used to automate segmentation, suggestion frameworks, and quality assurance.
Can small advice firms offer targeted support profitably?
Yes. Smaller firms can offer targeted support profitably, particularly when using vendor platforms rather than building custom solutions. Profitability generally depends on achieving sufficient customer volume, often in the range of a few thousand customers annually.
Does targeted support replace human financial advisers?
No. Targeted support does not replace human advisers. Technology supports segmentation and suggestion frameworks, while human staff oversee interactions, explain options, manage exceptions, and escalate customers who require full regulated advice.
How long does it take to implement targeted support?
Implementation timelines vary, but most advice firms should expect a nine to twelve month period from final regulatory publication to full operational deployment. Vendor solutions may reduce implementation time.
What are the main compliance risks in targeted support?
Key compliance risks include incorrect customer segmentation, inappropriate suggestions for certain groups, unclear customer communication, and failure to escalate complex or vulnerable cases to full advice.
How does targeted support support Consumer Duty requirements?
Targeted support helps firms meet Consumer Duty requirements by delivering appropriate outcomes, fair value, clear communications, and consistent monitoring across large customer populations.
Can targeted support be delivered digitally?
Yes. Targeted support can be delivered through digital channels such as web portals, mobile apps, chat, and email, as well as through phone or face-to-face interactions, provided regulatory requirements are met.
How is customer suitability ensured without individual advice?
Suitability is ensured by designing robust customer segments, validating suggestion frameworks, embedding regulatory rules, and continuously monitoring outcomes to identify and correct issues.
What happens if a customer’s situation becomes more complex?
If a customer’s needs exceed the scope of targeted support, systems and staff should trigger escalation to full regulated advice or other appropriate services.
Should firms run pilots before full deployment?
Yes. Pilot programmes allow firms to test segmentation, suggestion frameworks, technology performance, and customer outcomes before scaling targeted support across larger populations.
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