COBS 9B.3 General provisions

The nature of a targeted support service means that it may involve:

1. (1) the provision of an investment service within the scope of MiFID (for example, where the ready-made suggestion is in respect of one or more transactions relating to financial instruments); or
2. (2) insurance distribution activity (for example, where the ready-made suggestion is in relation to a life policy).

1. (1) The provision of a targeted support service to which the rules in this chapter apply is not subject to the suitability requirements in COBS 9 or COBS 9A.

2. (2) Principle 9 applies to a firm providing targeted support and requires that a firm take reasonable care to ensure the suitability of its advice for any customer who is entitled to rely on its judgement.

    

1. (1) The effect of COBS 9B.3.4R is that, in relation to its provision of a targeted support service, a firm must apply other parts of the Handbook on the basis that the client is a retail client.

2. (2) COBS 9B.3.4R does not prevent a firm from categorising a client differently for other purposes (COBS 3.7.7G).

    

Unless the context otherwise requires, in this chapter:

1. (1) ‘individual’ is used in relation to the design of consumer segments to refer to a notional natural person by reference to whom a consumer segment is defined; and
2. (2)  ‘client’ is used in relation to the delivery of ready-made suggestions to refer to a natural person to whom a firm provides, intends to provide or has provided, a ready-made suggestion.

A firm must:

1. (1) in its design of its targeted support service, act with due skill, care and diligence in:
   1. (a) identifying those situations, involving shared financial support needs or objectives, for which to specify ready-made suggestions;
   2. (b) defining consumer segments; and
   3. (c) specifying suitable ready-made suggestions that meet the shared financial support need or objective of the consumer segment for which they are designed;
2. (2) in its delivery of its targeted support service, act with due skill, care and diligence in:
   1. (a) establishing whether a client aligns with a consumer segment; and
   2. (b) communicating with clients, including in relation to the nature and limitations of the targeted support service; and

3. (3) always conduct itself in a manner that is consistent with its obligation to act in good faith towards retail customers (PRIN 2A.2.1R).

    

1. (1) FG21/1 (Guidance for firms on the fair treatment of vulnerable customers: https://www.fca.org.uk/publication/finalised-guidance/fg21-1.pdf) is relevant to firms’ relationships with their clients, including in the design and delivery of targeted support services.

2. (2) Firms also need to consider their obligations under the Equality Act 2010 (or equivalent legislation in Northern Ireland). Principle12 and PRIN 2A support existing legal requirements, such as those in the Equality Act 2010, by requiring firms to monitor whether any group of retail customers is experiencing different outcomes than other customers and take appropriate action where they do.