Partner Michelle Quinn has provided comment in Law360 on the challenges facing the FCA in launching its Targeted Support Regime, outlining how it can be smoothly implemented alongside its potential impacts.

Discussing the likely timeline for the launch of the regime, and the challenges facing the FCA, Michelle said: “The FCA’s targeted support regime is expected to be finalised in 2026, with the associated rules and regulations anticipated to be implemented in 2026/27.

“There are a number of factors that have the potential to impede the smooth working of the new regime. First, there is anticipated regulatory complexity. Firms will be expected to navigate the new boundary between ‘guidance’ and ‘advice’. If firms get this wrong and their ‘targeted support’ strays into ‘regulated advice’, this could expose firms to liability. Linked to this, it is entirely possible that consumers may also find it difficult to appreciate the distinction between “targeted support” and “regulated advice” and as such, may not appreciate what level of regulatory protection they will have for the support they receive.

“Second, there may be issues with operational implementation of the regime at firm level. Firms will need to put systems in place to appropriately identify and group consumers by their shared characteristics and to deliver the targeted support recommendations. This will involve costs to the firm and may undermine a firm’s ability, and therefore their willingness, to offer targeted support. This might be a particular issue for smaller firms.

“Third, in order to group consumers into appropriate groups, firms will have to gather and process consumer data. Firms will need to be mindful of data privacy, consent and data protection and be alive to the risks inherent in storing and processing consumers’ personal data, such as data breaches.”

Michelle went on to highlight the ways in which both the FCA and the Government could help ensure smooth implementation of the regime, stating: “It is likely that legislation will be required in order to establish a new specified activity of providing “targeted support” as outlined in the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2025. This legislation would clarify that targeted support is distinct from regulated personalised advice. The government is also exploring potential policy options to address barriers posed by direct marketing rules, such as the ‘soft opt-in’ exception under the Privacy and Electronic Communications (EC Directive) Regulations 2003, SI 2003/2426, which may require further legislative changes.

“It is unlikely that legislative change can do much to address the basic operational challenges firms will face when implementing the new regime, but it can at least provide some clarity and guidance for firms and consumers alike on the operation of the regime itself such as the distinction between what constitutes ‘targeted support’ and what is ‘regulated advice’. This should reduce litigation risk for firms offering targeted support. Legislation should also clarify the methods of redress to consumers and set out how the Financial Ombudsman Service and the Financial Services Compensation Scheme will operate in respect of targeted support.

“Outside of legislation, there are a number of things the FCA / Government could do to assist with the smooth implementation of the targeted support regime.

“First, they may want to consider operating a pilot scheme before rolling out the regime more widely. This will give the FCA, the Government and Firms the opportunity to identify and address potential issues at an early stage and before consumers and firms have been exposed to unnecessary risks and potential liability. Second, the FCA could provide clear and practical examples of what amounts to ‘regulated advice’ versus ‘targeted support’. Third, the FCA could provide practical guidance and examples to aid firms in grouping consumers appropriately.

“If the implementation of the regime goes smoothly, it will change the financial advice space for the better, allowing firms to reach more consumers and giving consumers access to financial guidance that was previously unavailable to them. If the implementation does go smoothly, there should be no need for mass redress. Unfortunately, litigation is somewhat of an inevitability. It is almost inconceivable that there won’t be some issues at firm level with the implementation of the regime. This could range from firms giving regulated advice instead of targeted support, to issues with the grouping of consumers to a data breach.”

Michelle’s comments were published in Law360, 2 January 2026.