The pros and cons of the FCA’s new targeted investment support

As of April 2026, banks and other financial firms can now offer targeted support to investors.

This move by the Financial Conduct Authority (FCA) aims to help people in the UK make better-informed decisions when it comes to investing their money.

According to FCA figures, there are around 7 million people with over £10,000 in savings. With the Chancellor aiming to get more Brits investing, this new support system is intended to help people feel more comfortable with the process.

However, the introduction of targeted support isn’t without its downsides. Guidance offered by banks and other financial firms will fall short of tailored financial advice, potentially resulting in investors missing out on opportunities to grow their wealth.

Read on to discover the pros and cons of tailored investment support and how it compares to financial advice.

Pro: More people may feel confident enough to start investing

For many would-be investors, a lack of confidence or knowledge can be a significant obstacle to investing.

In fact, research by Aviva found that 23% of non-investors say they lack confidence and don’t know where to start.

With targeted support now more readily available through banks and other financial firms, more people may be encouraged to start investing. Not only could this be good for the UK economy, but it could also give those people the opportunity to grow their wealth in the long term.

Getting started can often be difficult, and it’s easy to get overwhelmed by all the different options. Targeted support could be a good jumping-off point for new investors to build their confidence and experience.

Pro: Investors may be less inclined to seek investment advice on social media

According to the FCA, 1 in 5 investors seek guidance on social media.

But relying on advice shared online can be risky. Financial influencers (or “finfluencers”) are often unregulated.

In many cases, they may even be unqualified to offer advice. Anyone could start sharing investment tips online if they choose, meaning you can’t rely on their credibility to offer salient advice.

In worst-case scenarios, investment opportunities promoted on social media could actually be unauthorised. As an example, in February 2026, the FCA reported that seven social media influencers were sentenced for issuing unauthorised financial promotions.

By making professional, regulated, and qualified support more accessible, the introduction of targeted support could deter people from taking online advice at face value – reducing the risk of them falling foul of poor or unauthorised advice.

Con: The new guidance isn’t tailored to each individual’s circumstances

Whilst targeted support may be a helpful starting point for new investors, it’s important to note that its guidance is not tailored to individual needs or circumstances.

Instead, the recommendations are made based on group characteristics. Investors are segmented based on shared traits, such as retirement age or fund size. As such, suggestions are based on high-level information rather than on an in-depth assessment of each individual’s circumstances.

For example, the recommendations are unlikely to account for your family situation or tax position.

Although the FCA has stated that firms must ensure outcomes are suitable and only offered when they put consumers in a better position, suggestions may be generic or overly conservative.

As a result, the proposed investments may not be the best fit for your needs, potentially leading to missed opportunities for growth.

Con: Investors could become overconfident

Whilst building confidence for new investors may initially be a positive step, there’s a chance this could develop into overconfidence.

Investors may experience promising results in the early days of their investment journey. In some cases, this could lead them to put too much trust in the recommendations.

As they increase the amount invested, portfolios could become unbalanced – leading to increased risk. For example, if a particular investment performs well, they might purchase more shares, rather than diversifying their portfolio. Should the investment experience a downswing, its returns could be impacted significantly.

Overconfidence could also deter investors from seeking financial advice in future. If they’re happy with the results of targeted support, they may not realise the benefits of tailored guidance. Over time, this could result in potentially large sums of money being invested based on targeted support outcomes – leaving opportunities for further growth on the table.

Con: Guidance may be limited in scope

Targeted support may be helpful for new investors with fairly straightforward needs. However, it’s less likely to be suitable for those with more complex requirements.

For example, if you’re looking to consolidate multiple pensions, targeted support may not provide the guidance you need. Whilst providers can offer support on multiple pensions, the FCA guidelines prohibit them from advising on consolidating several pensions.

Independent Financial Planners can recommend a vast range of investments from the whole of the market and provide personalised guidance on complex needs.

Learn more about PenLife’s investment support services.

Investment support that’s tailored to you

Ultimately, targeted support may be suitable for new investors looking to dip their toe into the market.

But for those looking to make the most of opportunities to build long-term wealth, independent financial advice tailored to your needs may be more appropriate.

To find out how PenLife’s Financial Planners can support you to manage your investments, email us at enquiries@pen-life.co.uk, or call 01904 661140.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.