On 23 March 2026, the Financial Conduct Authority (FCA) published information and examples of good and poor practice for firms designing consumer segments for targeted support.

Background

The FCA published its policy statement on targeted support in February 2025 and also stated that it would publish further detail to support firms in making judgements when designing consumer segments. As a result, it is now setting out practical examples to help firms make these judgements.

Key examples

The FCA highlighted relevant examples, including the following:

  • Defining common characteristics: The FCA makes clear that firms have to judge how to design consumer segments at a sufficiently granular level while not needing to comprehensively consider the consumer’s circumstances or characteristics and, therefore, that the complexity of a situation is likely to be relevant to the type and/or number of common characteristics firms’ need to consider. For example, more complex situations will usually require a higher number, or more detailed set, of common characteristics, whereas it is likely to be possible to specify a suitable ready-made suggestion for a less complex situation based on fewer, or less detailed, common characteristics.
  • Considering data held on a consumer: The FCA explains that it does not expect firms to consider all the data they hold on a consumer or for them to undertake detailed searches of individual customer transactions to capture wider data beyond that needed to align a consumer with the common characteristics of a consumer segment, but that they should consider what is readily accessible (or ought to be) to the specific business area providing targeted support.
  • Using reasonable assumptions: The FCA highlighted, in relation to overreliance on assumptions, that the suitability of a ready-made suggestion will need to be assessed by reference to the shared financial support need or objective and, where relevant, common characteristics and that where information is material to suitability for the consumer segment (i.e. if an assumption was wrong, then there is a more than negligible risk that the recommendation would be unsuitable for the consumer segment) it should be reflected as a common characteristic.