Consumer Duty View+ – July 2026

The FCA has issued a flurry of publications in the run-up to the summer break. We wanted to bring together the different strands for clients in a holistic way analysing the practical implications for you all.

The publications all focus around the critical Government agenda which is to encourage a retail investment culture and moving savings into investments. As you will be aware, there is a new retail investment campaign announced by the Chancellor as part of the Leeds Reforms and a nationwide campaign which will raise awareness about the importance of investing for people’s future financial wellbeing and the value it brings to the economy. There are multiple workstreams which the FCA is now therefore taking forward - the FCA’s annual work programme for 2026/27 includes helping consumers navigate their financial lives as one of its 4 strategic priorities.

Key areas which the FCA covers in its latest publications are:

• Consumer Duty changes and CP26/23, see our client note here, including the latest on enforcement actions.
• Consumer understanding and disclosure: firms will already be implementing the new Consumer Composite Investments (CCI) regime, see our client note here and subsequent update here. The FCA is building on the CCI regime and provides the findings of its multi firm review on pre investment disclosures. The FCA has also released CP26/24 which is designed to simplify and streamline some of the costs and charges and related disclosures, see our article here.
• SIPP papers.
• FCA review into firms’ approaches to products and services.

As ever, we cover what these developments mean for your firm.

1. Enforcement Watch

On 7 July 2026, the FCA published its second edition of Enforcement Watch. In it we learnt that there are currently 11 open investigations that touch on the Consumer Duty.
• 1 is a wealth management firm where the FCA is concerned about financial promotions, high fees and the quality of engagement with the FCA

• 1 is a peer-to-peer lending platform where the FCA had concerns are information provided to customers and whether it was sufficient for them to make an informed decision about how to invest.
• 2 are against CMCs in relation to motor finance commission
• 1 is a small IFA who has ceased regulated activities
• 6 of these are in the insurance sector covering home and travel insurance.

In addition, the FCA highlighted both its “assertive” supervisory intervention powers (which were used 382 times last financial year), and its use of Skilled Person reports (used 30 times in the 3 years since the Duty was introduced).

2. FCA CP26/23: Consumer Duty - Scope and proportionality

At the end of June, the FCA published CP26/23 on changes to the scope and proportionality of the Consumer Duty, see our client note here. CP26/23 delivers on the FCA's Mansion House commitment (see our article on that here) to address concerns about the Duty's reach into wholesale and early-chain activity. The FCA acknowledges that in some areas the Duty has been applied more widely and more intensively than intended, generating unnecessary cost and uncertainty without clear benefit to retail consumers. The paper proposes a targeted package of rule changes and non-Handbook guidance designed to bring greater clarity, proportionality and predictability, without narrowing the Duty's core consumer protection purpose. The key proposals cover five core areas:

• Territorial scope. The Duty will be limited to business where the retail customer is usually resident in the UK. Business conducted wholly for non-UK customers will fall outside scope, though carve-outs will apply for activities with a clear UK nexus, including UK pension activities and pre-paid UK funeral plans.
• Scope of activities. The FCA is providing further clarity as to which activities fall within the Duty, including additional guidance on the concepts of 'retail market business' and 'material influence', and will introduce further exclusions for certain activities.
• Proportionate application and reliance. Additional comfort is provided for firms around information sharing, confirming they can rely on information from others in the distribution chain without being expected to oversee their compliance. Monitoring, information-gathering and outcomes reporting obligations will be refocused on a firm's own role and activities, reducing the volume of data gathered with little practical benefit.
• Board reporting. Additional guidance on the FCA’s expectations confirms that Duty reporting should be proportionate to a firm's role and can be integrated into existing governance structures.
• Interaction with PROD 3 and CCI. For price and value, the FCA has not gone as far as agreeing that compliance with PROD 3 can satisfy the price and value outcome. However, existing processes can support compliance with the Duty and there is no need to maintain separate processes. Manufacturers complying with the CCI regime will generally satisfy the consumer understanding outcome through those disclosures, without additional duplicative steps being required. However, the FCA notes that one area where to two regimes differ is the testing requirement under the Duty, so firms will still need to consider whether it is appropriate to test their CCI disclosures.
• Co-manufacturing: proposals to replace the co-manufacturer concept with separate “primary” and “secondary” manufacturers, with the greater burden for Duty compliance falling on the primary manufacturer.

The consultation closes on 18 September 2026, with a policy statement and final rules expected in Q1 2027. Firms in wholesale markets, complex distribution chains or cross-border business should engage, the proposals represent a significant and welcome recalibration.

3. FCA CP26/24: Simplifying Consumer Investment Disclosures and the FCA's multi-firm review

CP26/24: Simplifying Consumer Investment Disclosures

On 2 July 2026, the FCA published CP26/24 on simpler disclosure rules, see our article on that here. CP26/24 represents the next phase of the FCA's disclosure reform programme, fulfilling a commitment made in PS25/20 (see our client note on that here) to review MiFID-derived cost and charges disclosure requirements in 2026. The overarching aim is to align COBS disclosure rules with the new CCI regime on both a technical and conceptual level, streamline the fragmented disclosure landscape across MiFID, IDD, and non-MiFID business, and apply the same consumer understanding principles that underpin the CCI regime more broadly across the investment journey. The headline proposals are:

• Pre-sale cost disclosures. Firms must present the total of ongoing product costs and service costs pre-sale, aligned with the CCI product summary. One-off and transaction costs are disclosed as separate line items. The MiFID-derived cumulative effect illustration is removed both pre- and post-sale.
• Post-sale disclosures. Firms must continue to disclose total costs in pounds and pence and as a percentage. A 'reasonable estimate' of actually incurred costs is permitted where exact figures are disproportionate to obtain, and CCI cost data may be relied upon.
• Cash holdings. The prohibition on 'double dipping', charging fees while also retaining interest on cash, is codified. Firms must also explain in plain language how interest rates on cash balances are set.
• Streamlining across regimes. Requirements across MiFID, non-MiFID and IDD business are consolidated into a single, more consistent framework. Requirements for professional clients are simplified, retaining core obligations only.

The consultation closes on 21 August 2026, with final rules expected by end of 2026. Firms with MiFID, IDD or non-MiFID investment business should focus particularly on the removal of the cumulative effect illustration and the revised pre-sale cost presentation.

Multi-firm review: How well do pre-sale investment disclosure documents work for consumers?

Published concurrently with CP26/24, the FCA issued their multi-firm review of how well pre-sale investment disclosure documents work for consumers. The review assessed 132 pre-sale investment disclosure documents from manufacturer firms. Using the Flesch-Kincaid readability method, only 6% were written in plain English; 31% were scored difficult to read and 63% fairly difficult to read.

On intelligibility, assessed using the Amplifi platform against a GCSE-level benchmark of 70, all 172 documents reviewed (including documents from firms that both manufacture and distribute) fell below the benchmark. Word complexity driven by jargon and technical drafting was the primary cause.

The FCA will repeat the review next year to track progress. The message for firms is straightforward: current PRIIPs KIDs and UCITS KIIDs are not working for consumers. The window before the CCI regime's entry into force on 8 June 2027 should be used for meaningful consumer testing and plain English redrafting.

This also links to the Investment Association’s (IA) Risk Warnings Review, ‘Supporting a New Retail Investment Culture’ (the Review), published in April 2026. See our article on that here. The IA's Review is directly relevant to this broader reform agenda. A critical Government priority, embedded in the Leeds Reforms, is to shift the UK's savings culture and encourage greater retail participation in investment markets. The UK currently has the lowest rate of personal investment in the G7, with households persistently holding long-term savings in cash rather than putting them to work in capital markets. Improving how investment risk is communicated to consumers is not, therefore, a narrow disclosure exercise: it is central to building the retail investment culture the Government and regulators are seeking to foster. Firms that engage proactively with the IA's practical guidance now, moving away from formulaic, loss-focused warnings toward balanced, plain-language risk explanations, will be better placed not only to meet their Consumer Duty obligations but to support the wider policy goal of enabling more consumers to benefit from long-term investment returns.

4. SIPP Providers — CP26/20: Adapting our rules for a changing market

On 22 June 2026, the FCA published CP26/20 which introduces new Handbook rules for self-invested pensions (SIPP) operators in two areas: due diligence and the handling of pension scheme money and assets (PSM&A). The FCA's rationale is straightforward, the SIPP market has grown substantially but a subset of firms have exhibited inadequate due diligence processes, weak controls over trustee bank accounts and poorly maintained books and records. These weaknesses have led to consumer losses and, in the most serious cases, significant difficulties in achieving orderly wind-downs or transfers, underscoring the sector's systemic importance.

On due diligence, the FCA is codifying existing high-level obligations into explicit Handbook rules.

• For third parties (introducers, advisers and discretionary investment managers), operators must carry out initial and annual checks covering identity, regulatory permissions, the FCA Register and Warning List, and conflicts of interest, with enhanced checks for unregulated or overseas parties.
• For investments, a tiered approach applies: core checks on all assets (title, custody, valuation and tax status), with additional scrutiny for higher-risk or non-standard assets. The rules are not about individual suitability, they are designed to keep scams and fraudulent arrangements out of SIPP schemes.

On the PSM&A regime, many bespoke SIPP operators use an unauthorised trustee structure that sits outside CASS, resulting in inconsistent record-keeping and reconciliation standards across the market. The proposed new regime within COBS 19B sets minimum standards: operators must maintain accurate internal books and records; conduct daily reconciliations of pension scheme money and monthly external reconciliations; keep up-to-date investment holdings and transaction data; have clear data-sharing arrangements with third parties; and commission an annual independent audit reported to the governing body. A named senior manager must hold oversight of the regime.

The implementation period is two years, with an additional year available for operators with legacy third-party data dependencies. The consultation closes on 24 August 2026, with final rules expected in H1 2027. Bespoke SIPP providers using unauthorised trustee structures face the more significant uplift and should begin a gap analysis now.

5. FCA review into firms’ approaches to products and services

On 10 July 2026, the FCA released the findings from its October 2025 qualitative survey of 38 firms across banking, insurance, payments, asset management, consumer investments, funeral plans, and consumer finance, in the form of good and poor practice guidance. The review focuses on three areas: product and service design and target market; monitoring and review over a product's lifecycle; and distribution and third-party arrangements.

• On product design, the FCA found that some firms gave simplistic or generic target market explanations that were not appropriate for the product or service in question, suggesting a lack of understanding of prospective customers' needs or insufficient assurance that the target market aligned with the product's risk profile. Better-performing firms had mapped customer needs to product design through detailed customer profiles, conducted vulnerability impact assessments, and used inclusive design panels drawing on the experience of customers and charitable organisations.
• On monitoring, many firms tracked defined outcome metrics through routine and risk-driven reviews, but some appeared not to use management information to trigger targeted, risk-driven reviews when potential issues emerged in relation to customer outcomes. The FCA also noted that firms sometimes failed to validate whether interventions they had introduced in response to identified issues had actually improved outcomes for customers. The FCA praised firms that had established clear structures for engagement with distributors and again highlighted the industry developed Distributor Feedback Template as a tool for reporting across distribution chains.
• On distribution, many firms provided limited rationales for their distribution strategies, with some giving overly generic explanations and others failing to fully explain how they were assured that the distribution channels used by third parties were appropriate for the target market. The report is careful to note, consistently with the FCA's proposals in CP26/23, that firms are not expected to oversee the compliance of other firms in the distribution chain unless other regulation or contracts require it.

The findings are intended to help firms benchmark their own practices ahead of any further rule changes and to feed into the FCA's broader agenda of ensuring the Duty delivers real and proportionate benefits for retail consumers.

6. Consumer Duty in action: The FCA’s focus on vulnerable consumers

Three recent publications share a separate yet coherent theme: the FCA expects firms to demonstrate active, evidenced support for consumers in difficult circumstances, not merely to have policies in place.

• On 14 May 2026, Charlotte Clark, Director of Cross-Cutting Policy and Strategy at the FCA, published a statement reminding firms of their Consumer Duty obligations in the context of ongoing cost-of-living pressures. Firms were told to check that products and services continue to meet the needs of their target market as circumstances change, including for customers approaching financial difficulty. The FCA reminded firms to monitor outcomes actively, keep reviewing whether customers are receiving fair value, ensure communications are clear and timely, and maintain accessible consumer support. The FCA confirmed it will use supervisory and enforcement powers where it sees poor outcomes or inadequate action.
• On 13 May 2026, the FCA announced a review of bereavement processes at consumer investment firms, including platforms, advisers and wealth managers, prompted by research showing that fewer than half of bereaved customers (47%) felt they received the support they needed from financial firms. The review covers the full journey from notification through to settlement or transfer of investments, examining communications, service standards, support for vulnerable customers, and how fees are handled on bereaved accounts. Selected firms will be contacted from May 2026, with findings to be published later this year.
• On 27 March 2026, the FCA and the Information Commissioner’s Office (ICO) published a joint statement on regulatory expectations around vulnerability-related data. The statement addressed a tension firms frequently raise: how to record, share and use information about consumers in vulnerable circumstances in a way that is both Consumer Duty-compliant and consistent with UK GDPR and the Data Protection Act 2018. The regulators were clear that data protection law does not prevent firms from supporting vulnerable consumers, but firms must identify a lawful basis for processing, apply data minimisation principles, carry out data protection impact assessments where required, and be transparent with consumers. On data sharing across distribution chains, the FCA and ICO confirmed that manufacturers and distributors are expected to share relevant vulnerability-related information where necessary to deliver good outcomes, subject to appropriate data protection safeguards.

Taken together, these publications carry a consistent message: vulnerability support is now firmly in the FCA’s supervisory sights across all channels, life events and data practices. Firms should ensure they can evidence what they are actually doing and not just what their policies say.