FCA SETS OUT CONSUMER INVESTMENT PRIORITIES FOR THE YEAR AHEAD

The FCA has published the second of its new Regulatory Priorities reports, this time focusing on consumer investments. These reports replace portfolio letters and provide an annual summary of the FCA’s expectations for firms over the coming year.

Across the consumer investments sector, the FCA’s message is clear: support informed risk-taking, strengthen trust, deliver good consumer outcomes, and tackle financial crime and misleading promotions.

The FCA highlights four key priority areas.

Building a stronger investment culture

Firms should communicate clearly and avoid jargon. Consumers need to understand fees, risks and potential rewards before they invest.

The FCA will support the rollout of the new Consumer Composite Investments (CCI) regime. It will also introduce changes to the advice framework, including targeted support.

Strengthening trust

Firms should maintain strong governance and effective risk management. The FCA also expects responsible innovation.

As firms grow, merge or adopt new technologies such as AI, they must maintain operational resilience. Firms should identify and address risks quickly.

Securing good consumer outcomes

Under the Consumer Duty, firms must actively monitor customer outcomes. They should demonstrate fair value and ensure products meet the needs of all consumers, including those in vulnerable circumstances.

The FCA will also consult on how the Duty applies across distribution chains and client categorisation.

Strengthening financial crime controls

Preventing investment fraud and scams remains a major priority. The FCA is particularly concerned about scams linked to online activity and so-called “finfluencers”.

Firms must maintain robust systems and controls. They should oversee appointed representatives effectively and take an active role in protecting consumers.

The report reinforces several key expectations. These include clear communications, fair value assessments, strong governance and effective oversight.

Firms should consider the FCA’s priorities when reviewing client communications, product governance, financial promotions and financial crime controls in the months ahead.

The full report is available on the FCA website for those who want to explore the detail.