TARGETED SUPPORT seems to be getting legs, with take up from Royal London, Vanguard, Quilter, L&G and Aviva, Monzo, Zopa, Barclays, AJ Bell and Vanguard.   The key point for advisers to note, is that this Messiah born of the FCA is expressly outside the COBS 9/9A suitability regime that applies to normal investment advice.  What level of compliance regime is likely to apply to these firms using targeted support?  The FCA is about to give these firms a free ride on the backs of our ridiculously complex regulatory framework that ties all IFAs up in hours of compliance.  It is almost inconceivable that the FCA would now enforce against those taking up their pet project, the Great Targeted support solution.   What chance the IFA now?

There is nothing new in the exemption from COBS 9A - the biggest advice firm famously of course just ignored it.  Principle 9 still requires reasonable care over suitability, but the FCA has not imposed any IFA-style “percentage of files must be checked” rule for Targeted Support.  IFAC think that the standards applying will focus on the design of the delivery, rather than end up focusing on an adviser writing an individual suitability report.  FCA has created a new set of rules, under COBS 9B.10 - firms should “implement and maintain relevant systems, controls, policies and procedures”.  Suitably vague language then for a regulator!  

IFAC's guess is that the FCA and the providers will be using AI to review the work en masse.  Compliance will be something like "you look like a client B2, and therefore suitable for recommendation C3".  And machine agrees.  What a ghastly thought.  It will be up to the IFAs - again -  to pick up the pieces.  There has never been a better time to be an IFA.