The UK is sitting on a hidden treasure – £430 billion in idle cash savings. Yet every adviser knows the frustration: a prospect with serious wealth on the sidelines, unconvinced that traditional advice is for them. You want to guide them, but regulatory boundaries keep you from going further, and the opportunity slips away.

Now multiply that by millions. This is the advice gap in action, and it is one the FCA’s new Targeted Support proposals are designed to close.

The cost of this inaction? A widening advice gap, where money sits still and clients miss out on the gains that advice can bring.

The Financial Conduct Authority (FCA) wants to change that. Its new ‘Targeted Support’ proposals are designed to break down old barriers, giving firms more freedom to guide clients while helping savers put their money to work. It could reshape the way wealth managers scale their services and unlock a powerful new stream of client acquisition.

But regulation alone would not close the gap – wealth managers need to act. To seize the opportunity, firms will need to think differently about how they segment, model and deliver support at scale.

Keep reading to learn more about the proposed regime and what it means for your firm, clients and prospects.

The advice gap and why it matters

The consequences of the advice gap are hard to ignore. FCA research shows that individuals who take advice can grow their wealth by as much as 10% more over the following years compared with those who do not.

And the stakes are rising. As an adviser, you will know the conversations: clients worried about outliving their pension pots, yet too cautious to move idle savings. With an ageing population and growing pressure on state finances, the state would not help fill that gap directly – and firms that do not step in risk losing relevance.

Meanwhile, according to research by Barclays, almost half a trillion pounds of “excess savings” sits untapped in bank accounts, steadily losing value due to inflation.

When asked why they do not invest their money, the most common reasons the public cite are a lack of information, support or trust.

Reasons for choosing not to invest (Source: FCA research note, 30th of June 2025)

For wealth managers, this is both a challenge and an opportunity: closing the gap delivers better results for clients while opening new avenues for growth.

Targeted support – a new middle ground
Targeted Support is more than a regulatory adjustment. It is the FCA’s way of giving you a growth lever. For too long, advisers have had to choose between offering only generic guidance or shouldering the full burden of regulated advice. Targeted Support creates a middle ground: lighter-touch, group-based recommendations that let you engage people you would normally have to leave on the sidelines.

Instead of offering only generic guidance or full bespoke advice, firms will be able to make recommendations to groups of clients with similar characteristics.

For firms, that means thinking in terms of conversion funnels, not compliance headaches. Instead of watching cash-heavy prospects slip away, you can draw them in with accessible guidance, build trust, and move them toward a fully advised relationship when the time is right.

The implications are immediate:

• Prospect conversion: bring hesitant savers into the fold with group-based guidance that lowers the barrier to full advice
• Client retention: serve straightforward needs with lighter-touch support, freeing adviser time for the complex situations that drive value
• Scalable outreach: create repeatable journeys for common profiles such as newly retired professionals or first-time investors, turning one-to-one conversations into efficient engagement at scale

Each of these opportunities was previously constrained by the “advice versus guidance” boundary. With Targeted Support, firms have the flexibility to act, and the chance to turn regulatory reform into real growth.

A visual explanation of consumer support options, including Targeted Support (Source: FCA consultation paper, June 2025)

What this means for your firm
For wealth managers and advisers, Targeted Support creates new ways to deliver value to existing clients while also lowering the barrier to engage prospects who might previously have been out of reach.

Existing clients
Targeted Support allows wealth managers to offer lighter-touch responses to everyday needs. Situations such as adjusting a drawdown rate or reallocating within a model portfolio would no longer have to follow the same intensive processes as complex, bespoke cases.

This shift also improves the client experience. Those with less complex needs benefit from smoother, faster journeys while safeguards remain firmly in place for clients whose situations require bespoke advice.

The challenge is governance. Clear disclosure will be essential so clients understand where Targeted Support ends and full advice begins. If this line is drawn carefully, it can deliver better service without undermining compliance with Consumer Duty.

Prospects
The bigger opportunity may lie in acquisition. Millions of adults in the UK have substantial cash savings yet remain uninvested, or at least underinvested. Many of these individuals are reluctant to pay for full advice, but Targeted Support offers a way to engage them with lighter, group-based guidance.

Handled well, this first step can be the beginning of a longer client relationship. By offering relevant support at the right moment, firms can build trust and encourage prospects to see the value of moving into a fully advised service when their needs grow more complex.

This shift is already reshaping competition. The big fish are not waiting — HSBC is staffing up its wealth division and other firms with digital scale are moving fast to capture underserved client segments. If you wait for the final rules to land, you will be pitching to prospects that competitors have already onboarded. In this game, would you want to be picked last?

Customer journey touchpoint preferences of the mass affluent segment (Source: TCS Study on the UK Mass Affluent Market)

Guardrails and challenges

Targeted Support comes with clear responsibilities. Firms that want to offer it will need to apply for permission, even if they are already authorised to provide full advice. This ensures the FCA can test whether providers have the right processes in place before engaging clients under the new regime.

Clarity will be vital. Clients must understand what they are receiving, and where the line sits between Targeted Support and fully regulated advice. Misunderstanding could create both compliance risk and reputational damage. Governance frameworks and disclosure documents need to make the boundaries explicit.

There are also operational hurdles for firms: segmenting clients into meaningful groups, designing “situation-to-suggestion” pathways and ensuring that all outputs are monitored against Consumer Duty expectations to name a few. Firms must strike the balance between seizing this new opportunity and maintaining the safeguards that protect consumers.

Why your tech stack matters

Scaling Targeted Support is not simply a regulatory exercise, but also an operational one. If advisers are still re-keying data between systems or building models in spreadsheets, you will not be able to scale. Competitors that have already automated will.

To deliver Targeted Support effectively, firms will need technology that can:

• Segment clients intelligently into groups with shared characteristics, drawing on data from across the firm
• Map situations to guidance using automated rules that ensure consistent, compliant outcomes
• Provide engaging digital experiences where clients can access guidance through portals or apps that reflect the firm’s brand and value
• Maintain audit and compliance trails that evidence every interaction and show regulators that processes are being followed

Firms that already have modern, flexible platforms in place will find themselves at an advantage. Those still reliant on manual processes or fragmented systems may struggle to capture the opportunity at scale.

Scaling advisory starts here – but act fast

The FCA’s Targeted Support framework marks a pivotal shift in how advice and guidance can be delivered in the UK.

It comes at a critical time for the wealth management sector. Fiscal uncertainty is pushing high net worth clients to look overseas, while cross-border opportunities are opening up through initiatives like the Berne Financial Services Agreement. Firms that move now can use Targeted Support to strengthen their position at home and win new ground internationally.

The opportunity will not wait. Later this year the FCA will publish final rules and begin reviewing applications, with implementation expected in early 2026. That leaves a narrow window for firms to test client journeys, refine governance and ensure their tech stack is ready.

Targeted Support is not the end of the story. It is the start of a broader shift in how advice is regulated and consumed.

The firms who act now will turn it into a powerful acquisition channel. The rest will be playing catch-up. Which side will you be on?

Do not just plan for Targeted Support — deliver it.

Read the original article here.