How FOS reforms will affect financial services firms
In recent months, the FCA has been candid about what it wants from the consumer investments market with
08/05/26
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Why ongoing advice is facing a regulatory reset
In recent months, the FCA has been candid about what it wants from the consumer investments market with a deliberate level of openness.
Rather than issuing another set of portfolio letters or small technical adjustments, the regulator has chosen to articulate a much broader ambition. Its primary aim is to transform the UK’s investment culture so more consumers are empowered to invest for their long-term financial health – even where that involves taking risks and, at times, experiencing loss. That intent is set out in its Consumer Investments Regulatory Priorities report, which frames sector success not as risk avoidance, but as engagement, education and long-term thinking.
Why the FCA is speaking so plainly
The new Regulatory Priorities reports (of which there are nine in total) replace more than 40 portfolio letters. They are addressed directly to boards and chief executives with a clear expectation that firms will read them carefully, consider what applies and act. The FCA has described them as a single, coherent view of its supervisory focus – reducing noise and increasing transparency about how it will assess firms going forward. In turn, this makes the regulator’s direction of travel harder to ignore.
The Consumer Investments report has clearly outlined that it wants consumers to be better informed, more confident and more actively engaged with investments. It wants firms to move away from unnecessary disclosure and jargon that do little to aid understanding and instead communicate risks and rewards in ways that genuinely support consumers’ long-term decision making. Crucially, the regulator acknowledges that achieving this may mean more consumers taking investment risk and facing losses. That is not seen as a regulatory failure but as a natural consequence of a healthier investment culture.
This frankness reflects the reality of today’s market. In 2024, just over a third of UK adults held an investment product, yet many remained disengaged or overly cautious – often holding significant sums in cash rather than investing for the long term. At the same time, digital behaviour is rapidly changing. Almost one in five investors used social media to research investments or keep up to date with opportunities. The FCA is explicit that this leads to innovation and access on the one hand, and heightened risks of misinformation, fraud and scams on the other.
Rather than trying to regulate those behaviours away, the regulator has challenged firms to meet consumers where they are. This includes taking account of real levels of financial literacy and the opportunity to “outcompete scammers” through clearer, more relevant communications – while continuing to strengthen systems, controls and digital resilience behind the scenes.
Simplified advice reflects a broader shift in thinking
That same candour underpins the FCA’s consultation on simplifying pensions and investment advice.
The regulator has been explicit that the traditional advice model has left too many consumers unsupported at key decision points. Insisting on a full assessment of every aspect of a client’s financial circumstances, regardless of need, has driven up costs and reduced access. In response, the FCA is consulting on making greater use of simplified forms of individualised advice for consumers with more straightforward needs, to sit alongside comprehensive advice and targeted support.
As Sarah Pritchard, the FCA’s deputy chief executive has put it, for too long the support people need to make important financial decisions has been out of reach for many. The regulator wants a market that offers different types of help, delivered with confidence and with different price points – all whilst not diluting consumer protection.
This is more than a technical adjustment. It reflects a defined shift away from rigid process and towards proportionate judgement, underpinned by accountability for outcomes. And that shift has profound implications for how advice firms think about their ongoing advice services.
Ongoing advice under scrutiny
If consumers are being encouraged to engage more actively with investing, accept appropriate risk and take a longer-term view of their finances, ongoing advice inevitably becomes more complex.
In a Consumer Duty environment, ongoing advice can no longer be justified by tradition or routine alone. The FCA’s priorities make clear that supervision is increasingly focused on whether services continue to meet evolving customer needs, deliver fair value and adapt as circumstances change. The question is no longer simply whether a firm offers ongoing advice but how it knows that advice remains appropriate and valuable over time.
Many ongoing advice models were designed for a different regulatory era. Fixed annual reviews, standardised service definitions and assumptions about client engagement were once sufficient indicators of good practice. Today, those features are being re‑examined against actual client behaviour, outcome data and evidence of responsiveness.
The FCA has been consistent in stating that the Consumer Duty has moved into an evidencing phase. Policies, governance frameworks and monitoring processes are necessary but they are no longer the end point. The regulator wants to see how insights lead to action.
What the FCA are testing in practice
Across recent reviews, consistent lines of enquiry are emerging. The FCA is exploring how firms decide when ongoing engagement is genuinely required, rather than defaulting automatically to fixed review cycles. It is interested in how firms identify changes in clients’ circumstances between formal reviews and how they ensure that vulnerability, life events and shifts in risk tolerance are recognised and addressed.
Fair value is another focal point. Where clients engage less frequently with services over time, firms are expected to demonstrate how ongoing fees remain justified and aligned to benefits received. Again, the expectation is not for perfection, but for clarity of rationale supported by data and informed judgment.
Importantly, this scrutiny is closely linked to the FCA’s wider objectives. The regulator is not seeking to discourage innovation or constrain access to advice. It is testing whether firms can deliver more flexible, proportionate services while still evidencing good consumer outcomes.
Firms that can clearly explain why their ongoing advice model works – for whom, in what circumstances and with what safeguards – are generally finding supervision constructive. Where answers rely on habit or inherited structures, challenge escalates quickly.
Consumer Duty as an enabler, not a brake
There is a careful balance at the heart of the FCA’s agenda. The regulator wants firms to innovate, widen access to advice and better support long‑term investing, while also being confident that their services deliver good consumer outcomes in practice. Ongoing advice sits squarely at the intersection of those aims.
The Consumer Duty does not prevent firms from evolving their service models but it does require them to be deliberate. Firms must be clear about how services are designed, how they are monitored and how they adapt in response to insight. Data gathered through outcome monitoring, complaints or disengagement needs to feed back into decisions about service structure, not sit passively in reports.
In practice, compliant firms are reframing ongoing advice around outcomes rather than activities, using triggers and data to inform engagement and treating fair value assessments as dynamic rather than periodic exercises.
None of this requires wholesale reinvention. But it does require intent, clarity and evidence – precisely what the FCA’s latest supervisory question sets are designed to test.
Why this matters now
The FCA’s candour reflects a regulator that wants fewer surprises and fewer excuses. It is setting expectations openly, encouraging firms to innovate responsibly, while making clear that it will intervene where outcomes fall short.
For boards and senior leaders, ongoing advice is no longer a background service. It is a visible test of whether Consumer Duty is embedded in practice and whether firms can align ambitious regulatory goals with operational reality.
In that environment, preparation matters. Understanding what the regulator is asking, why it is asking it and how ongoing advice models will be assessed is becoming essential.
Firms that listen, adapt and evidence their approach for ongoing advice services will be best positioned as this next phase of supervision unfolds.
TCC works alongside firms to deliver Consumer Duty gap assessments and fair value reviews through to governance, operational resilience and outcome monitoring. As the FCA shifts supervision towards demonstrable control and measurable consumer outcomes – not just intent – that evidential discipline is becoming a critical part of regulatory confidence as expectations continue to rise.
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