Regulatory perspective and priorities for 2025

Introduction

We are really grateful for all PIMFA’s engagement and work over the last year, and I am delighted to be here today at PIMFA’s 2025 Compliance Conference.

In the next 20 minutes, I aim to update you about our 5-year strategy and the 4 priorities we see as key to enabling the UK financial services industry to prosper and improve lives.

These are:

• Support growth by enabling investment, innovation and ensuring the continued competitiveness of our world leading financial services sector.
• Be a smarter regulator: predictable, purposeful and proportionate. Improving our processes and embracing technology to become more efficient and effective.
• Help consumers navigate their financial lives by working with industry to boost trust, product innovation and ensuring the right information and support is available.
• Fight crime focusing on those who seek to use the fact they’re regulated to do harm. We will go further to disrupt criminals and support firms to be an effective line of defence.

These 4 priorities reinforce each other.

Progress in one priority will improve outcomes in the others. 

It is an ambitious agenda, but we cannot do this alone. We want to work with you all to deliver these priorities.

Supporting growth  

Let’s start with growth.

It’s the buzz word and it is difficult to avoid everyone talking about it.

There’s a reason for that.

A thriving financial services sector can help provide the money that funds the services we all rely on.

It also provides the returns on investments that put money in people’s pockets.

That’s why we are not afraid to say we are a champion of the growth agenda.

As the financial regulator, we want to play our role in creating that vibrant, innovative market that clients, good firms and the wider UK economy and its capital markets deserve.

Collaboration and engagement are a key part of this.

This means that you will see us out and about more, at key industry events such as this one today. We want to put a human face to an organisation which is sometimes seen as anonymous and overly opaque.

Mansion House/Leeds reforms

We want to challenge ourselves so that we are proportionate in our approach to regulation and don’t simply adopt a one-size-fits-all approach.

This is consistent with the messages we heard last year in feedback to a call for input asking whether, where and how we can simplify our requirements.

In addition, in the Mansion House speech in July, the Chancellor asked us to assess the impact of the Consumer Duty on wholesale firms. As they don’t serve retail customers directly, there have been some concerns whether it applies too broadly and hinders their ability to innovate and compete. We have been discussing this with stakeholders and very shortly will send our response, setting out how we plan to address the feedback we have heard.

Targeted support proposals

We also want to make sure that more people are getting support to make informed decisions.

Our proposals for targeted support for those with choices to make about their pensions and investments are a key part in expanding the supply of support to the consumers who need it – and narrowing that stubborn national advice gap between those who can afford bespoke personalised advice and those who rely on the support that is currently available for free.

Millions of people are stuck in this position.

Our Financial Lives survey[1] has consistently shown that only around 9% of consumers take financial advice – that’s just 4.6 million consumers.

There are about 7 million adults in the UK with £10,000 or more in cash savings who may be missing out on the benefits of investing throughout their lives.  

And nearly 15 million people are not saving enough for their retirement.  

We want to close this gap – as you all do too.

We recently consulted on a framework for targeted support, and we are working towards consulting on changes to our rules on simplified advice and ongoing advice services early in 2026.

Today, we have published a second consultation paper on targeted support[2]. This proposes some additional amendments, beyond the framework we have already set out, to make sure that our proposals work with existing Handbook requirements. This consultation closes on 16 October.  

I want to reassure you that we know targeted support cannot ever be a replacement for bespoke financial advice.  

Full-fat advice will continue to have an important role to play for clients who want or will benefit from more personal recommendations tailored to their specific circumstances.  

But we want targeted support and simplified advice to be part of a continuum of support so that consumers can pick what is right for them.

This is a once-in-a-generation opportunity to reshape the advice landscape and improve how people engage with their financial decisions.

We understand there are associated risks involved.  

We want people to invest for their future with confidence, understanding the rewards, risks and protection they will get.    

Our proposals are aimed at making sure there are good-quality suggestions while enabling the scalable delivery of support by firms to the mass market of non-advised consumers.  

These reforms should set the framework for the next 20 to 30 years, to support consumers now as well as future generations.

We recognise the importance of this and so we have been working with firms who are interested in providing targeted support in developing our proposals to support them to deliver this to consumers.

Our pre-application support service[3] has now opened, a month ahead of schedule, to allow firms to express a formal intention to apply to provide the service, which will allow us to assess them ahead of a formal application next year.

There are some trade-offs that we will have to make, but we think that they’re the right ones to make, to balance risk, to help more effectively.  

Thank you for feeding back on our consultation – we have received over 100 responses, which we will take into account as we develop the final rules.

Working with the Financial Ombudsman on targeted support cases

We know how important it is for industry to have clarity on how targeted support complaints will be dealt with.  

Targeted support will be a new regulated activity, different from regulated advice. Consequently, firms providing this service will be subject to a tailored conduct regime, which the Financial Ombudsman Service (FOS) will have regard to when assessing targeted support cases.    

We are clear that targeted support isn’t optimised for the individual and doesn’t carry the expectations that firms would have to demonstrate that it is.

Instead, firms will have to show that better outcomes can be delivered at a customer segment level through targeted support.

If firms believe that those better outcomes can be delivered through targeted support, then it can be offered.

If an individual subsequently loses money because of a market downturn, that does not necessarily mean that targeted support should not have been provided in the first place.  

We know that the way firms deliver targeted support will evolve over time.

We want to make sure that the redress system takes that into account. We believe that the changes announced in the ongoing FOS consultations are a strong package of reforms, which should address concerns around any standards being applied retrospectively.  

We also want to make sure we maintain oversight of how the regime works and any issues that may emerge after implementation, so that we can consider whether further clarification on our rules is required.

We recognise that for the benefits of outcomes-focused regulation to be fully realised, firms and consumers need to be confident that we have a consistent interpretation of regulatory requirements.

A key part of this will be the steps outlined in the most recent FCA / FOS Memorandum of Understanding[4], which includes a commitment to early engagement on the regulatory interpretation of our rules and provides a framework for cooperation.

This framework includes the scenario where the FOS would seek a view from the FCA on the interpretation of our rules and how eligible redress could potentially be assessed, to ensure our requirements are interpreted consistently.

We will employ this approach on targeted support to make sure that we provide industry with as much certainty as possible about how the redress framework will operate.  

We believe this will increase certainty, consistency and predictability in complaints handling, whilst also preserving the operational independence and impartiality of the FOS. 

Smarter regulator

This feeds into the second priority, being a smarter regulator.

The FCA is supporting firms to innovate and grow through game-changing tools such as sandboxes and an AI Lab[5] – all the while working closely with government and industry.  

But we are also taking a look at our own behaviour and how we can work better in a fast-changing world.

So, we are looking at ways we can work better for you too.

We are making sure any burdensome tasks that might not still be appropriate are scrapped.

Data decommissioning

We want to make our supervision more data-led and proactive.  

You have told us you would like to see less duplication and fewer returns.

We hear you. We are acting.

We will constantly review what information we ask for to make sure we’re only collecting what we need and will use.  

In April, we issued a Consultation Paper on decommissioning 3 returns[6] – helping 16,000 firms including all of you.  

We followed through on this in June, when we also proposed decommissioning 2 other returns[7] and reducing the frequency of another.

And earlier this month we proposed amending the reporting frequency[8] of 3 sections of the ‘retail mediation activities return’. So 3 of them become annual returns, rather than half yearly or quarterly.

This will mean at least 20,000 fewer submissions to us.

We hope you agree this is a good start. But we want to go further.

In the coming months we will make further significant proposals. We will continue to engage with you to deliver on our commitment to become a smarter regulator.   This will save you time and allow you to focus on delivering good outcomes to your clients.

Adviser survey

So whilst we have been able to reduce the number of regular returns, we have also considered how to be more focused about the information we are looking for in the first place.

This year we launched our survey of financial advice firms, which follows on from the wealth survey we have issued for the past 3 years.

Let me take this opportunity to thank you for taking the time to respond to our information requests.  

We promised to share with you some insights and statistics from our survey.

So as a taster, we know that from returns to date from over 50% of firms, including the largest firms in the sector:

• Over 92% of advice firms have told us they have vulnerable clients; this compares to 83% of wealth firms.  
• Advice firms also told us that in over half of the cases where there is a characteristic of vulnerability, they have made service adjustments to help clients.  

Making these changes to how you deliver service to suit the needs of clients is a core part of helping consumers navigate their financial lives, which is the next part of our strategy.

Helping consumers 

The Consumer Duty is at the heart of this and an area I am passionate about.

It’s hard to believe it’s been over 2 years since the Duty came into force. Since 2023, we’ve seen real and lasting change across financial services – especially in the investment sector.  

At its core, the duty is straightforward: firms should deliver good outcomes for consumers by offering products and services that meet customer needs, provide fair value, communicate clearly, and offer genuine support to help people make informed financial decisions.  

It gives firms the flexibility to innovate and focus on outcomes – creating a market that works for everyone.  

And after 2 years, the effect is clear.

Take investment platforms. We tackled the issue of ‘double dipping’, where firms charged customers fees on their cash holdings while also keeping the interest earned. This practice was costing consumers millions. Thanks to the Duty, that’s now largely stopped – saving people an estimated £10m a year.  

We have also seen changes to charging structures leading to them being clearer, with fairer pricing.

Importantly we’re also seeing better outcomes when things go wrong. Complaints upheld for unsuitable advice or mis-sold products have fallen from 39% in 2022 to 26% in 2024 – a clear sign firms are changing their behaviour for the better.  

Cracking down on poor practice  

The duty has also empowered us to act swiftly where we’ve seen problems.

For example, we stepped in where firms charged ongoing advice fees without delivering ongoing advice. We’ve also stopped firms charging ongoing advice fees for deceased customers whilst their estates were being administered.  

Adapting to a fast-changing world

Our work continues in several dynamic and important areas:

• Trading apps: With more people investing via mobile apps without advice, we reviewed several ‘neo-brokers’ and found gaps in risk assessments and fair value checks. This fast-growing sector needs to improve, and we expect firms to raise their standards.  
• Complex exchange traded products: We’ve launched a review into complex exchange traded products to make sure these are sold responsibly and that consumers understand the risks. We expect to publish our findings by early 2026.
• Retirement income advice: Following on from our Thematic Review last year, we published a good practice article[9] in June alongside our Investment Advice Assessment Tool[10]. This transparency aims to help firms understand how we evaluate outcomes.

So where next for the Consumer Duty?  

The Duty has transformed how financial services firms put customers first.

Our focus now is to embed the Duty deep into firm culture so delivering good outcomes becomes second nature.  

During the coming year, we will focus on outcomes monitoring, fair value and consumer understanding, as well as how our requirements apply through the distribution chain.  

We’ll continue pressing on in high-risk areas and demanding firms prove they’re delivering real value and support.

Progress has been strong, but we’re not done yet.

We’re building a financial system where doing the right thing by customers is simply good business. 

Fighting crime 

The final strand in our strategy is fighting financial crime.  

As you know, our industry has inherently high exposure to financial crime. If left unchecked, financial crime does enormous damage to society and market integrity – and erodes both client and market confidence.  

We are ready and determined to act against bad actors as always, but with a changing world we also want to adapt our approach to raise standards together more collaboratively.

Online safety and finfluencers

People unlawfully promoting financial services on social media will be stopped.  

Our message to finfluencers is clear. They must act responsibly and only promote financial products where they are authorised to do so – or face the consequences.  

We recognise the harm that getting unregulated advice from finfluencers can have on consumers and how proper financial advice and wealth management can lead to good outcomes.  

We know this problem isn’t limited to the UK. That’s why in June we led a group of 9 regulators as part of an ‘international week of action[11]’ against unlawful finfluencers. This comes on top of the FCA launching criminal prosecutions against 9 unlawful finfluencers[12] in 2024 and announcing the charge of 3 finfluencers a matter of weeks ago.

We will continue to take action against those who give advice unlawfully, to protect consumers and the integrity of our markets.  

While we continue to act, it is not our role to moderate social media platforms. Platforms themselves must take responsibility.  

There are still too many weaknesses in the controls of social media platforms. It is too easy to promote illegal content online. It is too easy for bad actors to evade blocks, such as by ‘phoenixing’ or ‘lifeboating’ to new accounts. Not enough is being done to combat new threats, such as deep fake scams of authorised firms.  

Not only do these weaknesses harm consumers, but they undermine efforts by legitimate financial services firms to ‘meet’ consumers where we know they are turning for support – online.  

We urgently need social media platforms to step up and stop this illegal content at source. We welcome the introduction of the Online Safety Act and look forward to its robust implementation.

We want to hear from regulated firms if you are seeing illegal content online and any challenges you are experiencing when reporting illegal content to tech platforms, such as if you spot deep fake scams of your firms.

Our call to action for firms 

So, what I hope you will keep in mind from what I have said:

• We are at the beginning of our new strategy.
• We want to challenge ourselves to be a smarter regulator.
• We want to engage with you so we can raise standards together.

Now I know you don’t always like requests from the regulator, but I have 3 asks of you:

• On growth and smarter regulation, you continue to provide input into our proposals, on targeted support, simplified advice, data decommissioning and other changes, to help shape where we are going. These changes will define the future for decades to come.
• On helping consumers, continue to challenge yourselves on the Consumer Duty and how best to make sure there are good outcomes for clients. Be innovative and flexible to meet the needs of consumers.
• On financial crime, let us know where you see illegal content online, and if you are having challenges reporting this content to tech platforms.