Financial advice, guidance or Targeted Support: what's the difference?

There are now several different levels of financial help.

Information is mainly factual. Your pension provider might tell you what funds you hold, what charges you pay or what retirement options are available.

Guidance helps you understand your choices. MoneyHelper, for example, can explain pension options and the things you may want to consider, but it does not tell you which specific product or course of action is right for you.

Targeted Support goes further. An authorised firm can make a ready-made recommendation designed for a particular group of consumers whose circumstances or objectives share certain characteristics.

Regulated financial advice can make a personal recommendation to you based on an individual suitability assessment appropriate to the advice being provided.

That makes Targeted Support genuinely different from traditional guidance. It can say more than "here are your options", but it is still different from an adviser making an individual recommendation after carrying out the suitability assessment required for that advice. MoneyHelper explains the differences between guidance, Targeted Support and advice.

Targeted Support became available from 6 April 2026.

Banks, pension providers, investment platforms and other financial firms can offer it if they have the appropriate FCA permission.

The basic model is straightforward. A firm identifies a financial need or objective and defines a group of consumers who share relevant characteristics. The FCA calls this a consumer segment.

It then designs a suggestion for that group. If information about you indicates that you fit the segment, the firm may give you that suggestion.

The FCA's rules make clear that this is based on limited information rather than a comprehensive assessment of all your individual circumstances. See the FCA Handbook rules for Targeted Support.

That does not mean the suggestion has to be vague.

The FCA has used examples involving people who hold excess cash beyond an appropriate emergency reserve, may be withdrawing from a pension at an unsustainable rate, appear to be saving too little for retirement, or need help deciding how to start taking income from a defined contribution pension.

A provider could potentially suggest investing some surplus cash. A pension provider could suggest a different approach to withdrawals. Targeted Support can also, where the FCA's conditions are met, involve suggesting particular investments or products.

So a message could effectively say: "People with the characteristics we have identified in you may benefit from doing this."

What it is not saying is: "We have assessed your wider financial position and concluded that this is the right course of action for you personally."

That is the most important distinction to understand.

A financial provider may already hold a surprising amount of information. A pension provider could know your age, pension balance, contribution history, investments, withdrawal history and intended retirement age. It might also ask additional questions before providing Targeted Support.

But that still does not necessarily give it a complete view of your financial life.

The FCA deliberately allows Targeted Support to operate without requiring providers to collect every piece of information that might affect someone's wider finances.

For example, its guidance says that a pension provider identifying customers who may be withdrawing unsustainably would not necessarily need to include an individual's mortgage payments or expected inheritance when defining the group. Similarly, when considering people holding excess cash, a partner's income might not be necessary to determine whether someone belongs in the relevant segment. Read the FCA's guidance on designing Targeted Support consumer segments.

There is an important safeguard. A firm cannot simply ignore relevant information it already holds and can reasonably access if that information indicates that its suggestion may be unsuitable.

But Targeted Support is not intended to turn every interaction into a complete household financial review. As we explored in Your pension provider knows your pension. But does it know your retirement?, knowing one financial product extremely well is not necessarily the same as understanding the wider life that product has to support.

You should not have to work it out from the wording of the suggestion.

FCA rules require a firm to make clear that it is providing Targeted Support. It must explain the nature and limitations of the service and tell you about the characteristics of the consumer group behind the recommendation.

Crucially, it must make clear that the suggestion is based on the characteristics of that group, was not produced following a comprehensive assessment of your individual circumstances and is not a personal recommendation specific to you. See the FCA Targeted Support disclosure rules.

That gives you some useful questions to ask whenever a provider suggests a financial action. Those questions are often more useful than asking whether the message simply "sounds like advice".

Targeted Support also changes who starts the conversation.

A customer can request it, but FCA rules can also allow firms to initiate Targeted Support where they have reasonable grounds to believe a customer is in a situation their service could address.

That could allow a pension provider, for example, to identify potentially problematic withdrawal behaviour and offer support before the customer asks for help.

There are still marketing and consumer-protection rules to navigate, and further work is continuing around communications to some automatically enrolled workplace pension members.

But the broader direction is clear: providers are increasingly expected to do more than simply administer financial products. Read the FCA's final Targeted Support rules.

Targeted Support is not simply ordinary guidance with a new label.

It is a regulated activity. Firms need the appropriate FCA permission and must follow specific Targeted Support rules alongside wider consumer-protection requirements such as the Consumer Duty.

Consumers can complain about the service and may ultimately be able to take a complaint to the Financial Ombudsman Service.

So Targeted Support should not be dismissed as an informal nudge. It is deliberately designed to provide more actionable help than traditional guidance, while stopping short of the individually tailored suitability assessment required for a personal recommendation.

Regulated financial advice remains different.

An adviser making an investment recommendation to you must gather the information necessary for the scope of that advice and have a reasonable basis for believing the recommendation is suitable.

Depending on the decision, that can include your income, assets, financial commitments, objectives, investment timeframe, tolerance for risk, ability to withstand losses and investment knowledge. See the FCA rules on assessing suitability.

That does not mean every piece of regulated advice automatically involves a complete examination of your entire financial life. Advice can have a narrower agreed scope.

The important difference is that the recommendation is made to you individually, rather than designed for a group into which you have been placed.

Not necessarily.

Many people will be comfortable making some financial decisions using information, guidance, Targeted Support, planning tools and their own research.

But individual advice may be worth considering where substantial sums are involved, the decision is difficult or costly to reverse, tax consequences are significant, different parts of your finances interact in complex ways, you are unsure about the risks you are taking, or valuable guarantees or safeguarded pension benefits could be lost.

Some pension decisions have specific legal requirements. For example, where safeguarded pension benefits worth more than £30,000 are being transferred or converted into flexible benefits, legislation can require appropriate independent financial advice. Targeted Support cannot be used for safeguarded benefits. GOV.UK explains the advice requirement for pension benefits with a guarantee.

The question is not whether everyone needs an adviser. It is whether the level of support you have received is sufficient for the importance and complexity of the decision you are making.

Pension savers are also likely to hear more about Guided Retirement.

This is separate from Targeted Support.

Under the Pension Schemes Act 2026, workplace pensions are moving towards retirement-income arrangements that can provide a default route for members who do not want to make every retirement decision themselves.

Detailed implementation is still under development, with the first major compliance dates currently expected from the second half of 2029 and into 2030.

The different forms of support could therefore work alongside one another: guidance explains your options; Targeted Support can make a group-based suggestion; regulated advice can make an individual recommendation; and Guided Retirement may provide a default retirement-income route within workplace pensions. See the Government's workplace pensions reform roadmap.

Suppose your pension provider suggests changing the way you take retirement income.

Understanding the suggestion itself is one question. Understanding what that change could mean for the rest of your finances is another.

You might also need to consider another pension, State Pension, savings, your partner's income, property income, spending plans, tax, retirement timing and how long your money may need to last.

That is where planning and scenario modelling can add something different.

The FCA itself says Targeted Support firms should consider directing consumers towards tools or modellers that can help them understand the implications of a ready-made suggestion.

A provider may help identify a possible action. A planning tool can help you explore how different choices might affect the wider financial future you are trying to build.

The distinction worth remembering is simple: a suggestion that is relevant to people like you is not automatically an individual recommendation made specifically for you. Understand what has been assessed, what has not, and then decide what level of help you need.

Financial Conduct Authority: PS25/22, final rules for Targeted Support

Financial Conduct Authority Handbook: COBS 9B Targeted Support

Financial Conduct Authority: firm considerations when designing consumer segments

MoneyHelper: guidance, Targeted Support and advice explained

GOV.UK: workplace pensions reform roadmap