The FCA and the Financial Ombudsman Service has published further detail to help consumers and the financial services industry understand how complaints around the new targeted support regime will be handled.
Targeted support — a newly introduced, one-off service providing ready-made investment suggestions for defined consumer segments — is not subject to full suitability rules that apply to traditional investment advice.
As targeted support is a one-off service, it does not involve ongoing suitability assessments. Firms are required to assess suitability at the point of suggestion and not on an ongoing basis. Therefore, FOS and the FCA say "suitability is a point in time assessment and is not judged with the benefit of hindsight".
FOS also said there are no rule changes relating to how firms should consider complaints, so will not be required to change their usual complaints handling process if already aligned with Chapter 1 of the Dispute Resolution: Complaints sourcebook (DISP).
The Ombudsman anticipates that many escalated cases will relate to service or administration issues and will not require FCA input. However, in situations where the interpretation of FCA rules is unclear or may have wider implications, the Ombudsman may seek the FCA’s view under the organisations’ updated 2025 Memorandum of Understanding.
A wider implication case could be one which affects a large number of consumers where there is a significant amount of redress at stake or where there is a risk of business failure.
The Financial Ombudsman will also consider issuing insights into the complaints it has received on targeted support and how it is dealing with them.
Both bodies say they will work closely with industry and consumer groups as targeted support develops, and will ensure their approach aligns with any future government reforms to the redress system.
Phil Smith, senior actuarial consultant at financial services consultancy Broadstone, commented: “Firms will naturally be cautious about how consumer complaints following the new targeted support rules will be treated by the regulator. The proactive statement from the FCA and FOS aims to give firms greater confidence. The statement underscores that suitability assessments for targeted support will be based on the design of consumer segments rather than at an individual level and will not be judged using the benefit of hindsight, helping firms innovate without fear of a disproportionate redress risk.
“The statement indicates that if the Financial Ombudsman identifies an issue with wider implications that relates to the interpretation of FCAs rules on targeted support, it may seek a view from the FCA and consider how redress could potentially be assessed.
“This collaborative approach demonstrates a constructive effort by regulators to balance consumer protection with innovation, enabling firms to offer meaningful support that fills gaps between general guidance and full advice. As the regime develops, ongoing engagement and clarity on these boundaries will be vital to ensure that targeted support delivers tangible benefits for everyday investors while maintaining robust safeguards.”
