1. General overview and intent of CP26/10

What the FCA is saying:
CP26/10 outlines the FCA’s continued push to strengthen consumer outcomes, increase transparency, and ensure firms can clearly evidence the value they provide. They are building on existing frameworks, including Consumer Duty, meaning a shift away from prescriptive rules. Some of which they are actually getting rid of!  

What it means for advisers:
The direction of travel is unmistakable, and not a surprise given everything we’ve seen up to now: the FCA expects firms not just to comply, but to demonstrate good outcomes with robust evidence.

Next actions:

• Review how you currently evidence client outcomes

• Assess whether your reporting would stand up to FCA scrutiny

• Make sure your compliance framework aligns with outcome-based regulation, not just process-based

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2. Shifting expectations around advice rules

What the FCA is saying:
The consultation emphasises that firms must apply suitability on a proportionate basis, considering the Consumer Duty framework.  

What it means for advisers:
This goes beyond disclosure and box ticking. Advisers must now:

• Define what clients actually receive for their service  

• Demonstrate that a recommendation is suitable

Broadly, these aren’t changes, however there are some nuances in the paper.  

Next actions:

• Revisit client segmentation. Are all clients receiving appropriate levels of service?

• Make sure your service proposition matches your fee structure in practice, not just on paper

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3. Service proposition - Annual reviews

What the FCA is saying:
Annual reviews could be no more, periodic suitability instead. Periodic is for the firm to derive.  

What it means for advisers:
New service propositions could be considered.  

Struggling to meet a certain segment due to annual review requirements...? There may not be one going forward.

Next actions:

• Review your client service proposition, consider where clients are over, or underserviced

• Review fair value assessment, especially if considering expanding on these.

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4. Implementation timelines and expectations

What the FCA is saying:
Although CP26/10 is a consultation, firms are expected to engage with the consultation, respond if they so wish (we would recommend), and understand what these changes could mean to the firm. When the consultation turns into policy, the implementation could be quick!

What it means for advisers:
The FCA’s expectations are already influencing supervisory activity, so early adopters will be in a far stronger position.

Action to consider:

• Conduct a gap analysis against the proposals now

• Prioritise high-risk areas, for example ongoing service and fair value

• Build an implementation plan ahead of final policy statements

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Final thoughts: it’s all about evidence, not intention

CP26/10 reinforces a consistent message from the FCA: Consumer Duty is the framework for regulation going forward. Putting the client at the heart of the business and ensuring good outcomes.  

Firms must be able to prove they are delivering good outcomes for clients, at a fair price, with clear and transparent communication.

For many advisers, the main challenge is in evidencing compliance in a way that stands up under scrutiny.  

The good news? This is our area of expertise; we can help you with any and all of the actions we’ve outlined.  

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What next?

If you’re a Verve client, we’ll catch up on everything FCA in your next check-in. As always, you can contact the team with any queries related to compliance or regulation.  

If you’re not a client yet but you’re looking for support with the latest FCA consultation or other compliance challenges, we recommend starting with our Dawn of Positive Compliance Whitepaper.  

If you’re unhappy with the support from a less-than-perfect provider, we can help with a free and easy switch – download our guide to switching compliance services here.

For everything else, see how we do compliance here, or get in touch with our friendly team today.

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