COBS 9B.5 Delivery of targeted support

A firm may provide a targeted support service to a client:

1. (1) at the request of that client; or

2. (2) at the initiative of the firm (but see COBS 9B.5.3R).

    

A firm must not initiate the provision of a targeted support service other than:

1. (1) in response to an express request from the client for the provision of:
   1. (a) a targeted support service of the type provided by the firm; or
   2. (b) other support relating to investments of a type which could be met by the firm’s targeted support service; or

2. (2) where the firm has reasonable grounds to consider that the client is in a situation which may be met by the firm’s targeted support service.

    

1. (1) A firm that approaches a client other than in compliance with COBS 9B.5.3R may be in breach of its obligations to the client under PRIN 2A.2.1R (Act in good faith), PRIN 2A.2.8R (Avoid causing foreseeable harm) and PRIN 2A.2.14R (Enable and support retail customers).

2. (2) COBS 9B.5.3R does not prevent a firm contacting clients to inform them of the availability of a targeted support service.

    

1. (1) A firm must only provide a ready-made suggestion to a client where it identifies, using reasonable skill and care, that the client aligns with a consumer segment.
2. (2) For the purposes of (1), a client aligns with a consumer segment where the firm confirms that the client:
   1. (a) is in the situation covered by the consumer segment;
   2. (b) (where relevant) has all of the including characteristics of the consumer segment; and

   3. (c) (where relevant) has none of the excluding characteristics of the consumer segment.

       

       

1. (1) A firm may identify such alignment by reference to information which it either holds or collects about that client (or a combination of both).

2. (2) The rules in this section recognise that not every targeted support service journey will be the same. The rules afford firms flexibility in the way that they engage with clients, save that certain information must be disclosed to a client in connection with a ready-made suggestion (COBS 9B.6.3R and COBS 9B.6.5R).

    

1. (1) The rules in this chapter are designed so that firms can provide clients with ready-made suggestions without the need to undertake individual suitability assessments in the manner required by COBS 9 and COBS 9A.
2. (2) The effect of the requirements in this chapter is that a client should receive a suitable ready-made suggestion where:
   1. (a) the firm has aligned that client with a consumer segment in accordance with the rules in this section; and
   2. (b) the relevant consumer segment and associated ready-made suggestion have been specified in compliance with the rules in COBS 9B.4.

3. (3) Notwithstanding (2), it is possible that there are considerations specific to a particular client which are not addressed by the common characteristics of a consumer segment with which that client is aligned. COBS 9B.5.11R requires a firm to have regard to information, beyond that required to align a client with a consumer segment, which may affect the suitability of a ready-made suggestion for a client.

    

1. (1) The effect of COBS 9B.5.5R is that a firm must not provide a client with a ready-made suggestion specified for a consumer segment where:
   1. (a) the client is not in the situation covered by the relevant consumer segment;
   2. (b) (where relevant) the client does not align with all of the including characteristics of the relevant consumer segment; or
   3. (c) (where relevant) any of the excluding characteristics of the relevant consumer segment apply to the client.

2. (2) COBS 9B.5.11R specifies further circumstances in which a ready-made suggestion must not be provided to a client.

    

1. (1) A firm ought reasonably to be aware of information which:
   1. (a) is held by the firm;
   2. (b) is relevant to the suitability of the ready-made suggestion; and
   3. (c) is, or ought reasonably to be, readily accessible to the business area of the firm engaged in the provision of the targeted support service.
2. (2) The information it would be reasonable to expect a firm to be aware of and have regard to in providing its targeted support service is likely to depend on the particular circumstances of that targeted support service. For example:
   1. (a) the context in which the targeted support service is provided; and
   2. (b) the nature of the situation which the targeted support service is designed to address.

3. (3) For example, if a client gave the firm information when taking out a mortgage several years prior to receiving the targeted support service, it would not necessarily be reasonable to expect that such information would be readily accessible to the area of the firm providing the targeted support service to the client.

    

1. (1) Firms are not expected to request information from a client during the targeted support service journey other than that required for the provision of the targeted support service.
2. (2) Where a client volunteers information beyond that which is requested by the firm during a targeted support service journey:
   1. (a) the firm may terminate the targeted support service journey for the client;
   2. (b) the firm may continue to provide a ready-made suggestion with which the client otherwise aligns if the firm is reasonably satisfied that the additional information does not indicate that the ready-made suggestion may be unsuitable for the client; or
   3. (c) where the additional information suggests that the suitability of a ready-made suggestion with which the client otherwise aligns could be affected:
      1. (i) the firm should consider whether to ask for any further information necessary to enable it to decide how to proceed; and
      2. (ii) if the firm determines that the additional information indicates that the ready-made suggestion may be unsuitable for the client, the firm may:
         1. (A) seek to align the client with a different consumer segment; or
         2. (B) terminate the targeted support service journey for the client.
3. (3) The situation in (2)(c) might arise because the client volunteers:
   1. (a) new information; or
   2. (b) information which appears to conflict with other information by reference to which the client is aligned with a consumer segment.
4. (4) The guidance in COBS 9B.7 is relevant to the situation in which a client’s volunteering of additional information results in the termination of a targeted support service journey.

5. (5) The firm need not consider the additional information for a purpose other than satisfying itself as to the suitability of a ready-made suggestion for the client, unless that information is relevant to the firm’s satisfaction of other requirements (for example, when reviewing its processes for the provision of its targeted support service under COBS 9B.10.9R).

    

In determining what steps to take where a client requests that a firm executes a transaction which is inconsistent with a ready-made suggestion provided by the firm, the firm should have particular regard to:

1. (1) the client’s best interests rule; and 

2. (2) its obligations to support retail customer understanding (PRIN 2A.5.3R) and to design and deliver support including by giving retail customers sufficient opportunity to understand and assess their options (PRIN 2A.6.2R(3)).