Wealth managers have long worked under the metaphorical shadow of regulatory oversight concerning ongoing advice.
Starting with the Retail Distribution Review (RDR) and more recently with the introduction of the Consumer Duty, firms have been on alert. Many anticipated the FCA would identify shortcomings, with a common expectation that enforcement action would be severe. And then February 2025 arrived.
The FCA’s feedback landed not with a crash but with more a muted thud. The regulator said issues were not systemic and its data showed that most firms were delivering what they promised. But behind the relief lay a key question: has the FCA softened or simply shifted its approach?
The regulator’s findings stated that in 83% of cases, reviews had been delivered. Another 15% faltered not because of firms but because clients declined or failed to engage. Only 2% revealed an absence of effort.
What feels like breathing space may be a staging ground for the next wave of scrutiny
For an industry bracing for headlines about mass non-compliance, the verdict was unexpectedly positive.
The FCA’s narrative echoed this. Unlike the hard line of recent years (where the emphasis was on refunds and redress), the regulator signalled pragmatism. Firms making demonstrable efforts, even if unsuccessful, might avoid the financial sting of redress.
This was a significant shift from what was widely anticipated; the FCA acknowledged that client disengagement isn’t always the firm’s fault and intent does matter.
But make no mistake – this is not leniency. The FCA still expects proactive service delivery, fair value and evidence. The softened language does not erase the obligation; it simply changes how firms need to think about demonstrating compliance.
It can be tempting for firms to read the February 2025 feedback as closure. But the FCA’s data collection continues, consolidator reviews are underway and a review of the rules is on the horizon. What feels like breathing space may be a staging ground for the next wave of scrutiny.
Ongoing advice still on the regulator’s radar
The challenge now is not whether firms can meet the bar but whether they can stay ahead of it. Those who treat compliance not as a defensive mechanism but as part of the value proposition will fare well and set themselves apart in an increasingly scrutinised market.
For boards and senior leaders, the conversation about ongoing advice needs to move beyond operational fixes. The FCA has made clear that it wants evidence of fair value, appropriate services and proactive engagement. This includes:
• Fair value that correlates to client trust and retention
• Proactive engagement in a market where disengagement is the norm
• Evidence and oversight ready for the regulator
The FCA has not closed the book on ongoing advice. It has, at most, turned a page. And there’s one element of the FCA’s messaging that demands its own spotlight: the question of whether firms should fix the past.
This is where regulation, liability and commercial reality intersect in ways that will define the sector’s next chapter.
Jason Wintie is strategic regulatory director at TCC Group
