FCA's guidance on targeted support in consumer segment design: considerations for firms

TLT picks out the key points you shouldn't miss...

What’s this about?

The FCA has published guidance aimed at helping firms design consumer segments under the targeted support regime following on from its policy statement PS25/22. The guidance includes a set of good and poor practice examples which illustrate firms’ need to balance a sufficient level of granularity without carrying out comprehensive suitability assessments. The FCA emphasises firms’ responsibilities under the Consumer Duty, appropriate use of consumer data they already possess, application of reasonable assumptions, and excluding characteristics. FOS will rely on this guidance when considering complaints.

Our Head of Financial Regulation, Amanda Hulme says...

"Providing appropriate targeted support in consumer segment design is a priority for our clients, and this guidance helpfully outlines those requirements by way of examples and clear guidelines".

The points not to miss...

Focus on the consumer duty and use of customer data

As discussed in our article, ‘FCA publishes consumer understanding good practice and areas for improvement’, the FCA continues to emphasise compliance with the consumer duty across its guidance, including in targeted support for consumer segment design. This extends to firms’ proactive and responsible use of customer data to ensure effective, informed design.

Defining the level of detail of a consumer segment

The FCA advises that if common characteristics are relevant in defining a consumer segment, including and excluding characteristics must be included. Importantly, defining a consumer segment must be done in a sufficiently detailed way to enable a firm to determine the suitability of a ready-made suggestion without conducting an all-encompassing determination.

Complex situations

The type or amount of common characteristics is likely to be indicative of a situation’s complexity. Firms are advised that the more complex a situation is, the higher the likelihood that a greater amount or more granular set of common characteristics will be needed to formulate ready-made suggestions and vice versa.

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Holding consumer data

Firms must rely on information of which it is privy to that indicates a ready-made suggestion may or may not be appropriate for a consumer. Secondly, firms are not obliged to ingather client information during a targeted support journey beyond that which is required for them to provide targeted support.

Application of reasonable assumptions

Firms may rely on reasonable assumptions to simplify consumer segments provided they are grounded in evidence and are immaterial to the suitability of a ready-made suggestion.

3-step approach

The FCA provides the following helpful formula when considering its requirements for firms: (i) firms should have regard to the information which is readily accessible to them as regards the particular business area providing targeted support; (ii) firms are expected to pre-define a wide set of common characteristics to determine individuals’ suitability in a group; (iii) as part of fulfilling their duty to clearly disclose the nature and limitations of targeted support, firms may wish to disclose the information which it has not considered.

At a glance...

Publication link	Targeted support: firm considerations when designing consumer segments
Published date	23 March 2026
Who has published it?	Financial Conduct Authority
Publication type	Guidance
Any key dates?	N/A
What's it relevant to?	Targeted support, consumer segment design, consumer duty

Author: Hannah Yeager

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2026. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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Date published

14 Apr 2026