Preparing for the FCA targeted support regime
The FCA released its much-anticipated findings from its review
12/12/25
Read more
Lessons from the FCA’s review for advice and wealth management consolidation
The FCA released its much-anticipated findings from its review of consolidation in the financial advice and wealth management sector on 31st October 2025, which were largely positive. The regulator highlighted the benefits of consolidation for firms, such as efficiency and growth.
Here is what we’ve learned.
The FCA’s findings are likely to lead to an increase in consolidation, with an acknowledgement that the paper aims to support growth by highlighting good practice. The regulator confirms good practice observed during its work, including strong governance and risk management processes. The report also provides details of areas where firms need to improve.
The review’s findings should prove to be a helpful tool for consolidators, as will the FCA’s clarification of its expectations for the sector.
FCA’s view on due diligence
The FCA called out strong due diligence pre-acquisition as good practice. It noted that strong due diligence was usually undertaken with third-party support and highlighted the importance of the firm understanding and challenging the findings where appropriate.
The regulator specified that some firms need to improve their due diligence. Examples given include the resourcing of due diligence and monitoring the process. The FCA also pointed out that it is important that firms adapt their processes depending on the type of firm being acquired, and its staff and client profiles.
The FCA confirmed that the ‘tick-box’ approach to due diligence is not appropriate – and that compliance and regulatory due diligence remain critical.
Tailored approach to the integration process
Approaching due diligence with care is the cornerstone of successful integration. Areas that need improvement are often identified during due diligence, for example compliance resource, and integration plans should ensure that weaknesses identified in the due diligence process are addressed as part of the integration programme.
The report confirms that having clear, disciplined integration plans is good practice. Crucially, the FCA notes the importance of monitoring integration and customer outcomes, and the need for well-resourced teams to deliver these tasks. Similarly to the due diligence process, the FCA emphasised the importance of having adaptable integration processes tailored to the profile of the acquired firm.
Governance and resourcing
The FCA highlighted the need for firms to increase their resources as they grow. Firms should have robust compliance and risk functions, and appropriate monitoring in place to identify emerging risks.
The regulator identified areas for improvement, including the firm’s leadership not having sufficient knowledge and experience to oversee increasingly large, complex issues. The FCA also called out firms having a lack of independent challenge at the board level and at committees reporting to the board.
Group debt and risk management
A large proportion of the FCA’s focus is on group debt management. This should not be a surprise to the firms, given the prudential focus of the regulator’s document requests and the impact financial circumstances can have on customer outcomes.
Areas the report focused on included group level financial resilience and solvency, as well as the importance of stress testing.
Impartial reviews and support from TCC
TCC advisory experts have helped many firms with their regulatory due diligence needs and with post-acquisition reviews, including firms that formed a part of the latest FCA review. We use our expertise to help identify potential risks and opportunities in our regulatory due diligence process, supporting firms in their post-acquisition integration and ensuring alignment with the FCA’s expectations.
We also provide specialist interim teams to ensure firms have appropriate resource as they grow. Our experienced file reviewers also offer timely support, helping firms to deliver their past and business-as-usual file reviews.
Book a time with our consolidation specialists to help you understand the regulatory expectations and how we can support your firm.
Get in touch