What the FCA’s Regulatory Priorities report means for consumer investment firms

What happened?

The FCA published its first Regulatory Priorities report in February, covering the insurance sector, followed by a report on consumer investments on 4 March. The consumer investments report sets out four strategic priorities: building a stronger investment culture, strengthening trust, securing good consumer outcomes and strengthening financial crime controls.

Lucy Castledine, the FCA’s Director of Consumer Investments, reinforced the report’s importance during a keynote speech at the TISA Inclusive Investing Conference, confirming it should act as a guide for firms’ boards and chief executives.

Across the four priorities, the FCA sets out 11 specific expectations for firms, with two areas standing out as particularly significant: fair value assessment and product design.

Why does it matter?

The nine Regulatory Priorities reports are intended to become the FCA’s central annual communication to sectors, so firms should treat the report relevant to them as a key regulatory publication rather than routine correspondence.

The sections outlining “what we expect firms to do” require close scrutiny. Firms are expected to objectively assess whether current practices meet the FCA’s standards and act where gaps exist.

Who is affected?

Consumer investment firms, and in particular the boards and chief executives who are expected to use the report as a guide for governance and strategic priorities.

Key risks

• Ongoing FCA investigations into potential breaches of fair value requirements.
• Product design or distribution that is not clearly aligned to defined target markets.
• Vulnerability considerations that are not evidenced in product design and monitoring.
• Outcomes monitoring and management information that does not demonstrate intended results.
• Ongoing advice services that have not been reviewed against the FCA’s February 2025 findings.

Actions to take

1. Review fair value assessments to ensure they are comprehensive, well-documented and regularly reviewed.
2. Check that product design and distribution processes remain aligned with defined target markets, including vulnerable customers.
3. Build meaningful outcomes-monitoring management information that shows whether products deliver intended results.
4. Review ongoing advice services against the FCA’s February 2025 findings if this has not already been done.
5. Where gaps exist, develop a structured action plan approved at an appropriate governance level, with clear timelines and accountable owners.

Wider implications

The consumer investments report signals the FCA’s wider shift towards sector-by-sector annual communications. Firms in other sectors should expect similarly detailed priorities reports and treat them as a recurring feature of supervisory engagement.

Recommendations

At TCC Group, we support firms with regulatory gap analysis, Consumer Duty adherence and outcomes-monitoring frameworks, helping firms assess where they stand against the FCA’s expectations and develop practical next steps.