The Financial Conduct Authority (FCA) should reconsider its proposed changes to the targeted support regime, as they risk causing confusion, affecting consumer confidence, and introducing unnecessary operational challenges for firms, The Investing and Saving Alliance (TISA) has said.

While the organisation voiced its support for the regime in general, it raised concerns about the FCA’s proposed mandatory signposting requirements for pension communications and its approach to remuneration disclosures.

In its consultation response, TISA said that the mandatory signposting rules could result in firms being required to direct customers to targeted support services before those services are fully operational or available.

It warned that this would risk creating confusion and frustration for consumers, while placing unnecessary compliance burdens on firms, including firms that do not plan to provide targeted support.

TISA argued that targeted support providers should be given the flexibility to communicate in a way that reflects their service models and rollout timelines.

The organisation also warned that the FCA’s approach to remuneration disclosures could inadvertently undermine consumer confidence and trust, as requiring firms to explain complex internal cost structures and cross-subsidisation models risked overwhelming consumers with information that was unlikely to be helpful.

Furthermore, it said that the proposals could also act as a barrier to targeted support being made available to members of trust-based pension schemes.

“Targeted support has the potential to transform how consumers engage with financial services, but it must be built on a disclosure framework that is intelligible, supports consumer confidence and aligns with how firms operate,” said TISA head of policy, Sophie Legrand-Green.

“The FCA should leverage the Consumer Duty and recognise firms’ ability to judge what information is most useful to their customers, how best to communicate it, and when their services will be ready.

“A flexible, principles-based approach – rather than rigid disclosure mandates – will better support innovation, operational readiness and consumer confidence.

“We welcome the FCA’s commitment to progressing this regime and stand ready to work with the regulator and industry to ensure its success."

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