FCA outlines its plans to help people get more financial advice for important decisions

With rules for targeted support now in place and the FCA preparing for their roll-out in the coming weeks, the FCA has launched a consultation (CP26/10: Simplifying the pensions and investment advice rules), seeking to make it easier for firms to give more simplified forms of advice to consumers. The FCA wants to remove barriers to innovation and promote competition in the market, while maintaining consumer protection. Responses are sought by 22 May 2026. 

CP 26/10 in fact is seeking to deal with two FCA commitments:

• firstly to consolidate, simplify and reframe the advice rules – the aim being to reduce the actual and perceived regulatory burden to better help firms navigate the flexibility afforded by those rules; and
• secondly to review existing rules relating to financial advisers’ ongoing services – to ensure ongoing advice rules remain fit for purpose.

The proposed changes look set to materially impact the business models of all firms operating in this space, including investment, wealth and/or portfolio managers, retail banks,  financial advice firms, AFMs and others. 

The core goal of the FCA is to ensure that consumers have access to a range of pensions and investment advice services to meet their needs (Nikhil Rathi, FCA CEO recently gave the reminder for example that currently 75% of DC pension holders over 45 have no clear path for taking their money at retirement) – and the intention of these proposals is to help secure better outcomes at a lower cost, expanding access for consumers while reducing complexity for firms.  Stakeholders will have a keen eye to whether in fact they achieve this aim. 

Simplifying the advice rules (Chapter 2)

The FCA’s proposals on simplifying the advice rules include:

• Consolidating the rules in Conduct of Business Sourcebook (COBS) 9 and COBS 9A into a single, common chapter (a new 9C) (The rules for targeted support will remain in COBS 9B).  This will involve largely removing distinctions between advice on products in scope of MiFID II, insurance-based investment products and other life policies and pensions. Firms advising across different product types currently need to be mindful of multiple rule sets – and therefore operate parallel processes to ensure compliance.   This consolidation should reduce duplication, but there will nevertheless need to be a mapping process to ensure that existing procedures are aligned with the new rules.
• Amending rules to require firms to obtain “sufficient information” instead of “necessary information” when assessing suitability – this, the FCA say better reflects an outcomes-based approach whereby different advice services, and different recommendations to different clients, can reasonably be supported by taking account of different information (and allowing firms to demonstrate the quality of judgements and decision-making without needing to gather exhaustive information).
• Clarifying the rules so that firms are not required to assess a customer’s knowledge and experience where this would deliver no discernible benefit (having regard to such matters as the nature and scope of the service provided and the complexity of any recommendation).  No changes are currently proposed to the application of the suitability rules relating to professional clients.
• As part of assessing the suitability of a recommendation, simplifying the language about considering the risk that a customer is willing to take, and being clear this is separate to the need to assess the client’s ability to bear loss. The current rules include references to “risk profile”,  ‘”risk tolerance”, “attitude to risk” and “preferences regarding risk taking. Although these terms all relate to how comfortable a customer is with investment risk, they’re framed differently and currently used inconsistently across MiFID, IDD and non-MiFID provisions, thereby creating uncertainty for firms.  The FCA propose having one term in the rules, “attitude to risk”, and clarifying through handbook guidance that firms are not required to use complex psychometric tools or detailed questionnaires to determine a client’s attitude to risk (albeit robust tools may be appropriate in certain situations).
• Deleting certain COBS rules where Consumer Duty rules provide an appropriate degree of protection for retail customers.
• Retiring Finalised Guidance 17/8 and, in due course, publishing updated case studies that help firms understand what it means to consider ‘sufficient’ information.
• Consolidating the different timing and content requirements for suitability reports to align with expectations under the Consumer Duty. Requiring that suitability reports only include useful, relevant information for clients, allowing for layering of disclosure requirements and risk warnings.
• Maintaining the charging and qualification requirements for advice, introduced following the Retail Distribution Review.

Ongoing advice (chapter 3)

The proposals regarding ongoing advice service include:

• Replacing the annual suitability requirement. Firms providing an ongoing advice service will instead be subject to a more flexible obligation to conduct periodic suitability assessments and determine the most appropriate review frequency based on an assessment of customer needs and circumstances, and in keeping with the consumer duty.  No doubt many firms will have client contracts which envisage annual suitability reviews – and should firms anticipate making adjustments for such existing clients, this will require some thought that the rules will not solve for.
• Clarifying the rules to make clear that firms may charge for ongoing related services linked to an earlier personal recommendation.
• Setting out FCA expectations as to how firms should fulfil their existing Consumer Duty obligations when dealing with clients who are not engaging with ongoing advice services.

Further discussion

In Chapters 4 and 5 of CP26/10 the FCA invites initial feedback, but is not currently consulting on proposals on the following:

• Trail commission payable to advisers and commission for non-advised distribution.
• Suitability requirements that should apply to advice provided to professional clients. In the draft rules the FCA proposes, for now, to apply the new rules to services provided to professional clients in broadly the same way that current rules apply to such services.

Next steps

The deadline for comments on CP26/10 is 22 May 2026 – with the FCA aiming to publish a Policy Statement in Q4 2026.