UK: The FCA’s Regulatory Priorities for the consumer investments sector

Why should I read this?

The FCA has published its Regulatory Priorities report for the consumer investments sector.  The report is relevant to advisers, wealth managers, SIPP operators, investment platforms, crowdfunding platforms, peer-to-peer lending platforms, and CFD providers. 

Regulatory Priorities reports replace FCA sector portfolio letters (colloquially known as “Dear CEO letters”) and aim to be a “succinct one-stop shop” for regulatory information.  The reports will be published annually and are intended to communicate the FCA’s sector-specific priorities, expectations and programme of work in a clearer, more consistent way. 

Firms’ boards and CEOs should review the report carefully to ensure they understand what the FCA expects and which areas to focus on.

What are the FCA’s consumer investments priorities?

The FCA’s priorities for the consumer investments sector are building a stronger investment culture, strengthening trust, securing good customer outcomes, and strengthening financial crime controls.

What else will the FCA focus on?

Other areas of focus for the consumer investments sector are:

• Operational resilience: The FCA expects platforms and other key market participants to be operationally and cyber resilient, protect client assets, and withstand market shocks.
• Financial resilience and market structure: The FCA will review group structures to identify firms using corporate arrangements to avoid liabilities or shift losses onto consumers or the Financial Services Compensation Scheme if they fail.
• Cryptoassets: The FCA will publish its final policy statements on the cryptoasset regulatory regime in 2026.
• Senior Managers and Certification Regime (SMCR): Along with HM Treasury and the PRA, the FCA is reviewing the efficiency and effectiveness of the SMCR with the aim of reducing the regulatory burden on firms.

What is the ongoing status of the previous Dear CEO letters? 

Most Dear CEO letters issued prior to April 2022 are no longer current, although there are some exceptions, as explained on the FCA’s “Supervisory correspondence” webpage.  However, the FCA is continuing to make all Dear CEO letters, even those which are historical and no longer current, available on that webpage. 

It would appear that the FCA expect firms to want to continue to refer to former Dear CEO letters, which were notably more detailed and granular than the Regulatory Priorities reports which replaces them.  While expired Dear CEO letters will no longer be as persuasive as they once were, it seems that firms may still refer to them if the level of guidance in Regulatory Priorities reports is insufficient or the Dear CEO letters give specific guidance.  While we would not expect firms to be penalised for not following expired Dear CEO letters, when in doubt, firms may take comfort from doing so.

What should I do?

Boards and CEOs of consumer investment firms should consider which priorities and recommendations in the report apply to their firms and take action where necessary.  They should also consider whether their firms have business lines that could be included in other Regulatory Priorities reports. 

Practical steps for firms to take include reviewing:

• your approach to testing and monitoring, to ensure your communications enable customers to make informed decisions about products and services;
• your approach to assessing fair value, taking account of the FCA’s examples of good and poor practice relating to the price and value outcome;
• the design and quality of your management information, to ensure it is useful and actionable;
• your risk register, to ensure it captures emerging as well as existing risks to your business; and
• your financial crime systems and controls, particularly in light of recent FCA enforcement action against several firms, to mitigate the risk of your firm breaching regulatory requirements.

Failure to meet the FCA’s expectations will expose firms and senior managers to the risk of regulatory intervention such as supervisory or enforcement action.

Julian Brown, Financial Services Partner, comments:

“The FCA’s new approach to high level regulatory guidance, given through its new sector based Regulatory Priorities reports, replaces its previous patchwork of Dear CEO letters.  The new approach is part of the FCA’s commitment to furthering the UK Government’s growth agenda and meeting its own secondary international competitiveness and growth objective.  We expect the Regulatory Priorities reports will deliver a greater strategic coherence to the FCA’s regulation of consumer investments and other sectors.  We note the high level and principles based approach taken in the Regulatory Priorities reports which is consistent with the FCA’s ambition to regulate outcomes not processes.”

How Eversheds Sutherland can help

Eversheds Sutherland offers market‑leading support across financial services disputes and investigations, acting for major banks, funds, insurers and other institutions in navigating regulatory actions, enforcement matters and complex litigation. The team combines deep sector expertise with global reach, adopting a collaborative and transparent approach that helps clients anticipate emerging risks and operate confidently in a fast‑moving regulatory environment.

The firm’s Financial Services and Markets Regulation, Investment Funds and Asset Management capability provides an industry‑focused, comprehensive perspective across the financial services ecosystem. Drawing on global technical expertise, the team advises across capital markets, banking, insurance, asset management, payments, fintech and financial innovation, supporting clients on both multi‑jurisdictional mandates and local market developments. This integrated approach enables organisations to respond to regulatory change, adapt to market evolution and seize new opportunities with clarity and assurance.

Further reading on UK financial services regulation

• HM Treasury consultation on the Appointed Representatives Regime
• FCA consultation on application of the FCA Handbook to cryptoasset firms – high level standards
• FCA Policy Statement on targeted support – retail investment aspects
• FCA discussion paper on Expanding Consumer Access to Investments
• FCA Policy Statement on Consumer Composite Investments (CCI)
• Reform of the Senior Managers & Certification Regime