FCA Proposal: Ending Mandatory Annual Reviews for Ongoing Advice

Overview and Key Changes

The FCA has proposed removing the mandatory annual suitability review for clients receiving ongoing financial advice.
Instead, firms would conduct periodic suitability assessments, with frequency determined by client needs and Consumer Duty obligations.

Removal of Annual Review Requirement

• Annual suitability reviews would no longer be compulsory.
• Firms must still ensure advice remains suitable over time.

Introduction of “Periodic Suitability Assessments”

• Advisers decide review frequency.
• Decisions must reflect:
• client needs
• client circumstances
• Consumer Duty requirements
• fair value expectations

Increased Flexibility for Firms

• Enables more tailored ongoing service models.
• Supports simplified and lower‑cost advice propositions.

FCA Rationale - Varying Consumer Needs

• Not all clients require annual reviews.
• Simpler or low‑risk portfolios may justify less frequent check‑ins.

Reduced Consumer Costs

• Lower review frequency can reduce ongoing fees.
• Frees adviser capacity for clients who need more support.

Fair Value Under Consumer Duty

• Firms must already evidence fair value.
• This reduces the need for prescriptive rules on review timing.

FCA Oversight and Monitoring - How the FCA Will Monitor Compliance

• Regulatory returns
• Complaints data
• Multi‑firm reviews
• Outlier identification
• Consumer research
• Direct engagement with firms

Enforcement

The FCA states it will take action where firms:

• fail to deliver contracted services
• cannot evidence fair value
• do not conduct suitability assessments when needed

Background and Context - 2025 Multi‑Firm Review Findings

• 83%: suitability reviews delivered
• 15%: clients declined or did not respond
• 2%: no attempt made to contact the client

2024 Supervisory Activity

• FCA wrote to 20 major advice firms regarding ongoing services.
• St James’s Place set aside £426m for potential refunds.
• Quilter indicated possible remedial costs.

FCA Request for Feedback

The FCA is seeking views on whether:

• reduced review frequency still provides adequate consumer safeguards
• additional transparency rules are needed
• pricing models must change when review frequency changes
• clients risk being signed up to services they do not understand or that do not offer fair value

FAQs

What is the FCA proposing?

To remove the mandatory annual suitability review and replace it with periodic assessments determined by advisers.

Why is the FCA making this change?

To give firms flexibility, reduce consumer costs, and align review frequency with actual client needs.

Will firms still need to review suitability?

Yes. Reviews must still occur, but timing will be based on client needs and Consumer Duty requirements.

Does this reduce consumer protection?

The FCA says no, but is seeking feedback on whether additional safeguards or transparency rules are needed.

How will the FCA ensure firms comply?

Through regulatory returns, complaints data, multi‑firm reviews, consumer research, and enforcement action where required.

What prompted this proposal?

Supervisory findings showing inconsistent delivery of ongoing services and significant remediation at major firms.