The FCA Board made the final Targeted Support rules on 26 February 2026. Applications opened on 2 March. The regime went live on 6 April 2026. PS25/22 sets out the framework, and the FCA's authorisation gateway is already taking applications. This is the biggest structural change to the UK retail investment market since RDR.
Most IFA firm owners read about it, decided it was a problem for the banks, and went back to the day job. That is the wrong call.
What Targeted Support actually does
Targeted Support is a new regulatory category that sits between guidance and advice. An authorised firm with the right permissions can identify groups of consumers who share characteristics and make ready-made suggestions designed for that group. The firm does not need to know the individual's full financial picture. There is no requirement for a suitability assessment in the COBS 9 sense. The recipient does not become an advised client.
The economics are obvious. A platform that holds a million customer records can segment its book, identify the customers in drawdown taking unsustainable income, and send each of them a recommended action with a one-click route to implement. No adviser. No fact-find. No ongoing fee. The cost per recommendation is pence. The retention impact is significant.
Where this lands for IFA firms
The IFA firms most exposed are the ones carrying a long tail of small ongoing-fee clients. The clients sitting below the threshold where senior adviser time is economic. The ones who get a perfunctory annual letter and not much else. These are exactly the consumers Targeted Support is designed to reach.
The competitive pressure will not arrive as a single event. It arrives in three ways. First, the platforms holding your client's SIPP or ISA start sending direct communications offering ready-made suggestions, framed as helpful and free. Second, banks with retirement propositions begin actively marketing Targeted Support to consumers who have an adviser they rarely see. Third, asset managers and consolidators acquire Targeted Support permissions and begin running outbound campaigns into consumer books they previously could not approach.
The IFA firm finds that clients it has held for fifteen years start asking why they are paying ongoing fees when the platform is sending them what looks like the same thing for nothing. The fee gets challenged at the annual review. Some clients leave. The cohort of low-margin clients shrinks and the cost-to-serve per remaining client rises.
The choice for firm owners
There are three responses available to an IFA firm and most owners need to pick one in the next ninety days.
The first is to apply for Targeted Support permissions and build the capability in-house. This is a real lift. New permissions, new processes, new MI, new compliance overhead, and a different commercial model. Most owner-managed IFA firms do not have the infrastructure or appetite for this.
The second is to ignore the change and hope. The risk is that within eighteen months the sub-threshold cohort has been quietly eroded by providers the firm cannot match on price or response time, and the ongoing-fee book the firm depends on for predictable revenue starts shrinking.
The third is to defend the sub-threshold segment with a structured non-advice review service that gives those clients a regular human contact, a genuine conversation about objectives and circumstances, and visible evidence that they are getting more from their adviser than from a ready-made platform suggestion. This is what Consumer Duty already requires. Targeted Support gives the regulator's expectation a market rationale that owners cannot ignore.
What good defence looks like
The defence is operational, not commercial. It is a structured review for every ongoing-fee client every year, regardless of fee size. Objectives checked. Circumstances confirmed. Vulnerability assessed. Holdings reviewed against the last suitability letter. Actions noted or explicitly deferred with reasoning. A short written output the client can read and keep.
That is what a Targeted Support recommendation cannot replicate. A platform sending an automated suggestion to a segment of 50,000 customers cannot replace a fifty-minute conversation in which the client explains that their spouse is in declining health, the planned retirement date has moved, and the income strategy needs to flex. The IFA firm holds that ground or it does not.
Why this is urgent
The Targeted Support gateway is open now. Large incumbents are already applying. The first material consumer campaigns are likely in the second half of 2026. By the time the impact shows up in a firm's retention numbers, the cost of rebuilding the relationship is several multiples of the cost of holding it now.
The CP26/10 consultation closes on 22 May 2026 and the policy statement is expected by year end. Firms that combine a robust review process for sub-threshold clients with a defensible periodic review framework under the new rules will be in a different position in twelve months from firms that have done neither.
How Pillar fits
Pillar Client Services delivers structured non-advice reviews for IFA firms under the firm's own brand, inside the firm's own systems. Every review produces the documentation Consumer Duty expects and the human contact a Targeted Support recommendation cannot match. The fee is flat. The clients stay yours.
If you have hundreds of clients you cannot afford to review properly with adviser time, and you have read this far, that is worth a twenty-minute conversation.