FCA consumer investments regulatory priorities

The Financial Conduct Authority (FCA) has replaced more than 40 portfolio letters with a new suite of Regulatory Priorities reports, published annually by sector. The consumer investments edition arrives at an inflection point for the industry. In 2025, the FCA made what it describes as the most significant policy changes to the retail investments landscape for a generation, yet the regulator is leaving no room for firms to exhale.

These reports are addressed directly to Boards and Chief Executives, who are expected to read them carefully and act where necessary - with the FCA's stated goal being less intensive supervision for firms doing the right thing, and stronger, faster intervention where harm is greatest. The numbers make plain why the FCA considers this sector a priority: in 2024, £1.49 trillion of UK retail investment funds were managed across a sector comprising over 5,000 firms and more than 7,000 appointed representatives.

The report applies to advisers, wealth managers, SIPP operators, investment platforms, crowdfunding platforms, peer-to-peer lending platforms, and CFD providers. This briefing sets out the FCA's four priorities for the year ahead, explains what is genuinely new in the regulator's thinking, and offers practical steps your firm should take now.

Priority 1: Building a stronger investment culture

Many consumers hold significant cash reserves they could invest in suitable products. To build a stronger investment culture, firms must support consumers and provide clear information, giving them the confidence to invest and to take appropriate risks that meet their financial goals. The scale of the challenge is vivid: in 2024, 41% of UK adults with £10,000 or more in investable assets held it all in cash savings.

What is new 

Previous FCA portfolio letters focused principally on policing conduct and preventing consumer loss. The tone here is conspicuously different. The FCA now expressly wants a stronger investment culture and a resilient consumer investment market where more consumers feel confident investing.

Structural reform backs that ambition: from early April 2026, firms can provide more engaging product information under the new Consumer Composite Investments (CCI) rules, which are designed to help support a thriving UK retail investment culture. The forthcoming consultation on simplifying the advice rules, alongside targeted support rules coming into force in April 2026, represents a decisive step in the Advice Guidance Boundary Review - well beyond anything signalled in previous sector communications.

Practical steps for firms

• Communicate clearly and honestly, giving consumers jargon-free information so they can understand the benefits, risks, and costs of investments before they make any decisions.
• Prepare for and support implementation of the CCI framework, review MiFID disclosures, and engage with the FCA's work on risk warnings.
• Engage with the Advice Guidance Boundary Review, including the forthcoming consultation on simplifying the advice rules, ahead of targeted support rules coming into force in April.
• Work proactively with legitimate finfluencers and ensure your financial promotions and online content are compliant, clear, fair, and not misleading.
• Collaborate with the FCA from the outset on innovative product launches, including Long-Term Asset Funds (LTAFs).

Priority 2: Strengthening trust

Strong controls, governance, conduct, and compliance procedures will build trust, manage risks, protect consumers, and enable sustainable innovation. There has been significant consolidation and rapid firm growth in parts of the consumer investment sector, including platforms and Model Portfolio Service (MPS) providers - developments that bring opportunities but also risks if controls do not keep pace.

What is new

The FCA's endorsement of AI as a tool to expand consumer access to investment opportunities marks a pronounced shift in register from earlier, more cautious regulatory messaging. The FCA is actively supporting innovative and high-growth firms through Early and High Growth Oversight, pre-application support, innovation services, and sandboxes, including its Supercharged Sandbox and AI Live testing. Most strikingly, the FCA is working with HM Treasury to create a provisional licences authorisation regime to reduce the barriers some firms face during authorisation - an initiative without precedent in previous consumer investments communications.

Practical steps for firms

• Act promptly to address emerging risks, including signs of inadequate financial resources.
• Assess new technologies and products to ensure good consumer outcomes, and strengthen financial resilience through stress testing and contingency planning.
• Ensure your firm offers fair value - with transparent costs and charges - and provides good service, including prompt transfer times.
• Prepare for the FCA's review of MPS firms, assessing whether Consumer Duty rules and requirements are met, including timely product transfers.
• Test AI applications and other propositions through the FCA's sandbox ahead of broader deployment, and monitor the findings when the AI Live evaluation report is published.

Priority 3: Securing good consumer outcomes

Firms can boost consumer confidence by delivering good outcomes, understanding consumer needs, providing support, and designing products carefully. Accountability throughout distribution chains is essential for fair value and effective controls. The FCA has already addressed "double dipping" by SIPP operators and platforms, and firms distributing complex Exchange Traded Products should review the FCA's good and poor practice findings.

What is new 

The FCA's proposed client categorisation rules aim to strengthen confidence in protections while simultaneously reducing the burden on firms - a notable recalibration. The FCA is also reviewing how the appropriateness test balances responsibilities between firms and consumers, signalling a potential reallocation of where liability sits along the distribution chain. A forthcoming consultation on clarifying the application of the Consumer Duty across distribution chains will have wide-reaching implications for the whole sector - an issue largely absent from earlier FCA portfolio communications.

Practical steps for firms

• Design products and services that meet consumers' needs, including consumers in vulnerable circumstances, and monitor outcomes rigorously.
• Demonstrate fair value by clearly assessing costs and benefits, and only opt clients out of retail protections strictly in line with the rules.
• Review the FCA's client categorisation proposals and respond to the consultation, as the outcome will directly affect how your firm distinguishes between retail and professional clients.
• If you provide ongoing advice services, prepare for the FCA to follow up with a number of financial advice firms on the remedial steps taken since its February 2025 findings.
• Prepare for the FCA's forthcoming guide for finfluencers and review how your firm uses, supervises, or engages with influencer channels.

Priority 4: Strengthening financial crime controls

The scale of the financial crime threat is stark. There were 24,621 reported victims of investment scams and fraud in 2024, with reported losses of £553 million. A range of factors have increased crime risks, including AI, deepfakes, complex client structures, transaction layering, international networks, and cross-border flows, with criminal 'finfluencers' targeting inexperienced investors.

What is new

The FCA's scrutiny of appointed representative oversight is sharper and more specific than anything in earlier communications. The FCA recently found that 29% of principal firms did not conduct financial crime risk assessments for their appointed representatives, and has also seen misuse where firms with minimal regulated activity use FCA permissions to appear credible.

Emerging threats flagged in this report include concealed overseas pooled accounts, copy trading schemes, rising 'pump and dump' scams, and risks involving sanctions breaches and terrorist financing through retail channels - topics that were not prominently addressed in the FCA's previous portfolio letters for this sector. The FCA's enforcement appetite is demonstrable: the FCA successfully charged seven influencers who promoted an unauthorised foreign exchange trading scheme, who have recently been sentenced.

Practical steps for firms

• Maintain robust controls to prevent financial crime, including for investment fraud, money laundering, market abuse, terrorist financing, and scams, and strengthen surveillance and reporting.
• Oversee appointed representatives effectively - given that 29% of principal firms were found to have conducted no financial crime risk assessments for their ARs, this must be treated as a board-level priority.
• Review controls against the specific emerging threats identified by the FCA, including copy trading schemes, pump and dump scams, and layered transaction risks.
• Meet consumers where they are online: the FCA wants firms to proactively flood the market with legitimate, compliant content to displace scammers.
• Engage with the FCA's collaborative work with Ofcom and international bodies on tackling online scams and fraud.

Additional areas requiring attention

Beyond the four headline priorities, firms should note the following:

1. Operational resilience: The FCA wants platforms and other key market participants to be operationally and cyber-resilient, protect client assets, and withstand market shocks. Alongside the PRA, new rules for reporting operational incidents and material third-party information will be introduced following CP24/28.
2. Financial resilience and market structure: The FCA will review group structures to identify firms using corporate arrangements to avoid liabilities or shift losses onto consumers or the FSCS, and will work with firms to ensure that any wind-down is orderly.
3. SIPPs: Following the December 2024 Pensions Discussion Paper, the FCA will consult on rules governing SIPP operators' due diligence obligations and the handling of pension scheme money and assets.
4. Cryptoassets: The FCA will publish its final policy statements on the cryptoasset regime in 2026, with the cryptoasset regime gateway set to open shortly. Firms with crypto ambitions should monitor this closely and plan for the gateway opening.
5. SMCR: Working with HM Treasury and the PRA, the FCA is reviewing the efficiency and effectiveness of the Senior Managers and Certification Regime with the aim of halving its regulatory burden.

Conclusion

The FCA's inaugural Regulatory Priorities report for the consumer investments sector demands more than a cursory read from compliance teams - it demands a board-level response. What distinguishes this report from what came before is its dual character: a regulator that is simultaneously more reform-minded and commercially engaged than its previous portfolio letters suggested, and one whose enforcement record in this sector is unambiguous.

The FCA has banned advisers, brought cases against individuals who defrauded their clients, imposed restrictions on wealth management firms, and prosecuted finfluencers promoting fraudulent schemes. Firms that cannot demonstrate robust appointed representative oversight, accountability across distribution chains, or compliance with Consumer Duty obligations face a regulator that has shown it will act.

At the same time, the CCI regime, targeted support, client categorisation reform, and the AI sandbox represent a genuine opportunity to reshape how firms serve consumers - and to participate in building the framework that will govern the sector for years to come. Boards that read this report and do nothing will find that the FCA's promise of "stronger, faster action" is not a figure of speech.