FCA consultation paper on simplifying consumer investment disclosures

FCA consults on simplifying consumer investment disclosures: key proposals and multi-firm review findings

On 2 July 2026, the Financial Conduct Authority (FCA) published Consultation Paper CP26/24, Simplifying Consumer Investment Disclosures, together with a multi-firm review of how well current pre-sale investment disclosure documents work for consumers. These publications represent a significant step in the FCA's programme of reform of the UK retail investment disclosure framework after the FCA's commitment, following Brexit, to replace the EU-derived PRIIPs and UCITS disclosure regimes with a distinctly UK framework built around consumer outcomes.

The consultation builds directly on the new Consumer Composite Investments (CCI) regime, the final rules for which were published by the FCA in December 2025 in PS25/20. As we examined in our client note, the CCI regime fundamentally reorientates the UK's approach to pre-sale retail investment disclosure. The core thesis was, and remains, that the previous generation of disclosure documents, namely the PRIIPs Key Information Document (KID) and the UCITS Key Investor Information Document (KIID), had become instruments of compliance rather than consumer communication: rigidly templated, jargon-heavy, and widely regarded by both the industry and the regulator as failing to engage or inform retail investors in any meaningful way. In their place, the CCI regime introduces a more flexible, outcomes-focused 'product summary', with no prescribed design or layout, and with the Consumer Duty acting as the animating principle requiring firms to focus on delivering good consumer outcomes rather than technical box-ticking. The CCI regime comes into full force on 8 June 2027 though many of the provisions are already in force.

CP26/24 fulfils a commitment made in PS25/20 to review the remaining MiFID-derived disclosure requirements in 2026. Its central objective is to align the Conduct of Business Sourcebook (COBS) disclosure rules applicable to firms providing investment services with the principles and approach underpinning the CCI regime, and to consolidate what are currently three separate disclosure regimes, applicable to MiFID, Insurance Distribution Directive (IDD), and non-MiFID business respectively, into a single, streamlined framework.

More broadly, the proposals form part of the FCA's wider work to modernise retail investment disclosures. The FCA explicitly acknowledges its ambition to future-proof the regime for a market being shaped by new technologies, noting that artificial intelligence (AI) is already changing how consumers engage with investment information and that disclosure rules must be fit for a world in which consumers use AI to access and summarise investment information. This signals an expectation that firms should not simply transpose existing approaches into new formats but should actively consider how their disclosure design functions in an AI-mediated environment.

Providing the evidential backdrop to both the CP and the CCI regime's implementation is the FCA's multi-firm review OH published simultaneously, which found that of 132 current pre-sale investment disclosure documents examined for readability, only 6% were written in plain English, and that all 172 documents assessed for intelligibility fell below GCSE level. The FCA frames these findings as both justification for reform and a call to action for firms approaching their CCI transition. The consultation closes on 21 August 2026, with the FCA intending to publish a Policy Statement with final rules by the end of 2026.

Scope of the Consultation

CP26/24 is directly relevant to a wide range of market participants. The FCA's proposals apply to:

• firms carrying out MiFID or equivalent third-country business;
• firms engaged in insurance distribution activities; and
• firms carrying out other forms of designated investment business.

The consultation will also be of interest to manufacturers of CCIs and other investment products, industry and trade bodies, and consumer groups.

Key proposals in CP26/24

1. Pre-sale cost disclosures: alignment with the CCI Regime

Under the existing MiFID-derived rules, firms are required to provide consumers with a personalised estimate of the total aggregated costs, covering both product costs and service costs, before a transaction is made. The FCA acknowledges that, despite these requirements, consumer understanding of investment costs remains low: its 2024 Financial Lives Survey found that 30% of non-advised platform users said they did not know how much they are charged for investing on their platform.

The FCA proposes to maintain the general principle that firms should present both the costs of the service and the costs of the products to consumers before they commit to a transaction. However, it proposes significant changes to how pre-sale product costs are presented, so as to replicate the focus of the CCI product summary. Specifically:

• Ongoing costs plus service costs. The firm should present consumers pre-sale with the total of ongoing product costs and service costs combined. This aligns pre-sale disclosures with the CCI product summary's focus on ongoing costs.
• Separate disclosure of other costs. One-off product costs and product transaction costs should not be aggregated into the headline figure but disclosed separately as individual line items. Firms must make clear when one-off costs will be incurred, particularly where they are paid upfront.
• Performance fees and carried interest. These should not be estimated pre-sale; instead, firms should describe them with an explanation of when they would be incurred. Where the relevant product is a CCI, firms can provide a link to the detailed explanation in the product summary.
• Closed-ended investment fund (CEIF) costs. The ongoing costs of CEIFs, which are deducted indirectly from a fund's net asset value, should also be disclosed separately, with an explanation of how they work.
• Implicit transaction costs. As under the CCI framework, only explicit product transaction costs need to be disclosed; implicit transaction costs such as slippage need not be included.
• Flat fee presentation. Where a firm charges a flat fee across a whole portfolio (such as a monthly fixed platform fee), the FCA proposes that this should be shown as a percentage of the consumer's total holdings with the firm, rather than as a percentage of a particular transaction only (which could make the fee appear artificially high).

Costs must continue to be presented on a personalised and annualised basis, displayed both as a percentage and in pounds and pence based on the consumer's investment amount. The FCA also encourages firms to move away from static PDF disclosures and to consider dynamic, integrated ways of presenting cost information within the consumer transaction journey, in line with their Consumer Duty obligations.

2. Post-sale cost disclosures

The FCA proposes that, in regular post-sale reporting, consumers must continue to be told the total costs incurred across all categories, in both pounds and pence and as a percentage. For products, this includes any one-off costs (including performance fees) and explicit transaction costs incurred in the reporting period.

CEIF costs should be excluded from the headline total and disclosed separately with an explanation, given their indirect impact on returns.

Firms will retain the freedom to provide further breakdowns of costs in post-sale reporting, and the FCA acknowledges that in practice most firms currently do so. The FCA also proposes to allow firms to use a 'reasonable estimate of actually incurred costs' where it would require disproportionate effort to obtain precise figures — for example where differing reporting periods, multiple service providers, or data constraints make exact calculation difficult. Firms would be expected to use their best endeavours to ensure accuracy and, in particular, to be able to rely on the same data as used for their CCI obligations, which the FCA expects will significantly reduce compliance burden.

3. Removal of cumulative effect illustrations

This is one of the most notable changes proposed in the consultation. Current MiFID-derived rules require firms to provide a personalised illustration of the cumulative effect of costs on investment returns, both pre-sale and post-sale. In practice, the absence of a prescribed methodology has led to wide divergence in approach. The FCA proposes removing the requirement for any personalised forward-looking cumulative effect illustration.

Pre-sale. The requirement is removed. Firms may nonetheless produce voluntary generic or dynamic cost-impact illustrations; the FCA notes that its Occasional Paper 32 found such tools can be effective in directing consumers toward better-value funds.
Post-sale. Firms must still show, in regular reporting, how total costs have impacted the performance of the consumer's investments. Firms have freedom over how to present this, and the FCA proposes that the information be made available to consumers over the lifetime of the service.

4. Cash holdings: interest and fee disclosures

For the first time in formal Handbook rules, the FCA is addressing how firms communicate with retail clients about interest and fees on cash balances. Its 2024 Financial Lives Survey found that 15% of consumer investment platform users hold more than 10% of their investments in cash, and that interest rate disclosure differs significantly between firms. The FCA's key proposals are:

• Codification of the ‘double-dipping’ ban. The FCA is now proposing rules to codify in the Handbook its previously stated expectation (set out in its Dear CEO letter of December 2023) that firms should not both retain interest on retail clients' cash balances and charge fees on those balances. The rule will provide that firms should only charge fees on cash holdings if they pass on interest in full.
• Up-front website disclosure. Firms must explain their cash interest or fee model prominently on their website alongside other fees information, including the interest rate paid and how it is set.
• At-deposit disclosure. When a consumer deposits cash, firms must provide a personalised indication of fees and an estimated first-year interest figure. This does not apply where cash is deposited for an explicit and immediate investment purpose or to pay fees directly.
• Post-sale reporting. Regular reporting must include the interest earned and fees paid on cash balances in the relevant period.
• Proactive engagement. Where significant uninvested cash is held, the FCA expects firms to consider their Consumer Duty obligations, which may include alerting the consumer to the drawbacks of that position.

The cash interest disclosure requirements are proposed to come into force in June 2027.

5. Simplification and consolidation of disclosure regimes

The FCA proposes to consolidate the current disclosure requirements, which are currently split across COBS 6.1ZA (for MiFID and IDD business) and COBS 6.1 (for non-MiFID business), into a single new chapter, COBS 6A. The intention is to remove the distinction between MiFID, IDD, and non-MiFID business where possible and to create a more consistent consumer experience.
The FCA also proposes to move the high-level disclosure requirements currently in COBS 2.2/2.2A, which broadly duplicate elements of COBS 6.1/6.1ZA, into COBS 6A, so that all relevant disclosure requirements are located in one place.

Other specific consolidation proposals include:

• Removal of IDD remuneration disclosure rules. The IDD-derived rules around the disclosure of remuneration for insurance intermediaries (COBS 6.1ZA.15B–15J) are proposed for removal on the basis that, in light of the Consumer Duty, they are considered excessively prescriptive. The FCA considers that the Duty's standards on fair value and staff incentives address the same underlying harms.
• CASS client asset disclosure rules. Near-identical requirements on client asset disclosures currently appear in both COBS 6.1, COBS 6.1ZA, and CASS 9.4. The FCA proposes to consolidate these into COBS 6A and delete CASS 9.4.
• Cryptoasset activities. The FCA confirms that the changes to COBS 6.1 introduced by the final rules for regulated cryptoasset activities (PS26/13), which come into force on 25 October 2027, will be copied, unchanged, into the new COBS 6A.

6. Professional clients and eligible counterparties

The FCA acknowledges that it is disproportionate to require professional clients to receive the same disclosures as retail clients when most professional clients have the capacity to negotiate bespoke arrangements that better suit their needs. The FCA therefore proposes to retain only a high-level obligation on firms to provide professional clients with transparent information about costs, satisfied by either:

• a disclosure in accordance with the retail client rules; or
• such information as the professional client otherwise agrees with the firm is adequate.

All other detailed disclosure requirements for professional investors would be removed, with limited exceptions for information about portfolio management services (on which other COBS 16A.4 rules depend) and compensation information. The cash interest disclosure requirements will not apply to professional clients or eligible counterparties.

Eligible counterparties would not be subject to the detailed rules in COBS 6A, other than the high-level requirement to receive information on costs and charges and on the safeguarding of client assets.

7. Transition and implementation

The FCA has designed a phased transition timeline that attempts to align the implementation of the new COBS 6A cost disclosure rules with the CCI regime go-live date of 8 June 2027, whilst avoiding placing an unnecessary implementation burden on firms:

• The revised COBS 6A cost disclosure rules are proposed to come into force close to the date of publication of the Policy Statement in Q4 2026, but firms will be permitted to continue complying with existing rules for an 18-month transition period running through to June 2028.
• From 8 June 2027, all CCIs must have a CCI product summary, at which point the legacy COBS 6.1ZA.14R rules will be retired. Between the publication of the Policy Statement and the CCI go-live date, firms distributing a CCI with a product summary may comply with either the existing COBS 6.1ZA.14BR rules or the new COBS 6A cost rules.
• From June 2028, the full COBS 6A rules will apply to all designated investment business. At that point, COBS 6.1ZA and COBS 6.1 will be retired.
• Cash interest disclosure requirements: proposed to come into force in June 2027.
• Other COBS 6A rules: an implementation period of 18 months from the date of the Policy Statement, meaning entry into force around June 2028.

The FCA is also proposing to amend the CCI transitional provisions to reduce friction during the transition period. Importantly, where a manufacturer chooses to produce a CCI product summary early, distributors will be permitted to continue providing consumers with the existing KID/KIID rather than being required to immediately switch to the new format. Manufacturers need not update existing KIDs or KIIDs during the transition period unless there has been a material change to the product's investment objectives, strategy, or risk-return profile.

Multi-firm review: pre-sale investment disclosure documents

Published alongside CP26/24, the FCA's multi-firm review of how well current pre-sale investment disclosure documents work for consumers provides a striking and important backdrop to the regulatory reform agenda. The review was carried out to understand how effectively current documents communicate with consumers before the CCI regime comes into force, and to support firms in making improvements.

Key findings

The findings are stark. Across both dimensions, the review reveals that current pre-sale investment disclosure documents fall well below the standard needed to support genuine consumer understanding.

• Readability
  Of the 132 documents assessed for readability using the Flesch-Kincaid method:

  • only 6% were written in plain English (GCSE level);
  • 63% were rated as fairly difficult to read (A-level); and
  • 31% were rated as difficult to read (undergraduate level).

• Intelligibility
  For intelligibility, every single one of the 172 documents assessed for intelligibility fell below the Amplifi benchmark of 70, equivalent to GCSE level. The primary driver of poor intelligibility was word complexity, attributable to the prevalence of industry jargon, technical phrases, and drafting choices that reflect the legal and regulatory language in which the underlying requirements have historically been framed.

The FCA notes the relevance of wider research indicating that 1 in 5 adults in the UK feels anxious about numbers and avoids situations involving numeracy, and that 49% of the UK working-age population have numeracy skills equivalent to primary school level. Against that backdrop, the findings of the review are a significant concern.

The FCA observes that existing PRIIPs and UCITS documents are highly templated and prescriptive, and that this rigidity has contributed to the use of jargon and legal language. It expects readability and intelligibility to improve materially under the CCI regime, which will give firms considerably greater freedom to design and present their disclosures, with standardised requirements limited to cost, risk and return, and past performance information.

A transatlantic parallel: The SEC's disclosure simplification agenda

The FCA's direction of travel resonates beyond the UK. In the United States, SEC Chairman Paul Atkins has announced a comprehensive review of Regulation S-K, the core public company disclosure framework. At the SEC Speaks conference in March 2026, Chairman Atkins called for a “spring cleaning” of the rulebook, arguing that over forty years of accretive rulemaking had caused it to grow “from the size of a gym locker to the size of an artificial-intelligence data center”, “burying shareholders in an avalanche of immaterial information” that “neither protects investors nor facilitates capital formation.”

The contexts differ, the SEC’s reform targets public company reporting, while the FCA’s focuses on retail investor product disclosure, but the shared diagnosis is striking: in both jurisdictions, regulators have concluded that mandated disclosure has grown so voluminous and complex that it risks obscuring, rather than conveying, what matters most to investors. The FCA’s response, through the CCI regime and now CP26/24, is to bet on simpler, more flexible disclosure anchored to genuine consumer outcomes. The SEC is making a structurally similar argument under the banner of materiality.

Implications and next steps

The FCA is clear that firms designing their own disclosure documents bear responsibility for asking whether consumers will be able to understand them and make informed decisions on that basis. The expectation is that firms will use the findings of this review as a prompt to critically assess their current disclosure documents and begin planning the improvements needed as they transition to the CCI framework.

The FCA has stated that it will repeat the review next year to track progress. Firms should therefore anticipate ongoing scrutiny of the quality of their consumer-facing disclosure materials and should treat this review as an early signal of the FCA's supervisory expectations.

Key implications for firms

The proposals in CP26/24, read together with the multi-firm review findings, have significant operational and compliance implications across the investment distribution chain. We highlight the following key areas for consideration:

• Systems and disclosure redesign: Firms will need to redesign pre-sale and post-sale cost disclosure processes, particularly to align product cost categorisation with the CCI framework and to remove cumulative effect illustrations. Given the FCA's encouragement of dynamic, integrated disclosures, firms should consider whether static PDF-based processes remain fit for purpose.
• Cash interest and ‘double-dipping’: Firms that have not already reviewed their cash interest and fee models in light of the 2023 Dear CEO letter should do so urgently. The proposed codification of the ban on ‘double-dipping’ means that what has previously been a supervisory expectation will become a hard Handbook rule.
• Consumer Duty alignment: The FCA is explicit that its proposed rules are designed to operate alongside, and in support of, firms' existing Consumer Duty obligations. Firms should review their Consumer Duty outcome assessments in light of the review findings on readability and intelligibility.
• Professional client disclosures: Firms dealing with professional clients should review their existing disclosure arrangements in light of the proposed move to a high-level transparency obligation, and consider whether to negotiate bespoke disclosure arrangements or to continue providing retail-standard disclosures.
• Coordination across the value chain: Distributors relying on data from manufacturers and other service providers to calculate post-sale cost disclosures should engage early with counterparts in the distribution chain to plan for the data-sharing arrangements needed to satisfy the new requirements, and to take advantage of the proposed 'reasonable estimate' provision.

Please do not hesitate to contact a member of our Financial Services Regulatory team if you would like to discuss any of the matters addressed in this note.