FCA CP26/10: Simplifying the Pensions and Investment Advice Rules

Why It Matters

The simplification lowers compliance costs for advisers while delivering clearer, more proportionate protection for retail investors. Aligning the rules with the Consumer Duty could accelerate product innovation and improve market confidence.

Key Takeaways

• Consolidates COBS 9 and 9A into single framework
• Deletes rules duplicated by Consumer Duty protections
• Shifts annual suitability checks to periodic reviews
• Removes mandatory knowledge‑experience test when unnecessary
• Opens consultation on trail commissions and professional‑client advice

Pulse Analysis

The FCA’s latest consultation arrives at a pivotal moment for the UK wealth‑management sector. Since the Retail Distribution Review forced firms to adopt stricter charging and qualification standards, advisers have grappled with a fragmented regulatory landscape that spans COBS 9, COBS 9A and a patchwork of Consumer Duty provisions. By consolidating these rules into a single, coherent framework, the regulator aims to reduce duplication, cut administrative overhead, and make the compliance narrative easier for both firms and auditors. This move also signals the FCA’s broader strategy to modernise the handbook in line with post‑Brexit market realities.

Key proposals in CP26/10 target the heart of the suitability process. Firms would no longer need to collect exhaustive knowledge‑experience data unless it demonstrably improves outcomes, shifting the focus to “sufficient information” that can be reasonably documented. The annual suitability review, long criticised for being a tick‑box exercise, would be replaced by periodic reviews calibrated to product complexity and client risk profile. By retaining the charging and qualification rules introduced after the RDR, the FCA preserves the consumer‑first ethos while allowing advisers to streamline advice delivery and potentially lower costs for clients.

The consultation period ends on 22 May 2026, after which the FCA plans a Q4 policy statement that could cement these reforms. Industry participants are already weighing the impact on technology platforms, as the reduced data‑capture requirements may free up resources for digital onboarding and real‑time risk monitoring. The open discussion on trail commissions and the extension of the new framework to professional clients could reshape fee structures across the advisory chain. Firms that engage early with the FCA’s feedback loop are likely to influence the final rules and position themselves competitively in a market that values both regulatory clarity and client‑centric service.