Reform in sequence: the FCA’s plans for consumer access to investments

The FCA recently published its feedback statement (FS26/3) summarising the responses received to DP25/3 on expanding consumer access to investments. The statement sets out key next steps across areas including:

• Financial promotion rules for high-risk investments
• Risk information for mainstream investments
• How appropriateness assessments work in practice
• Model portfolio services and the delivery of good consumer outcomes

We have drawn out some areas likely to be of particular interest to firms monitoring the direction of travel in this area. 

Investor categorisation 

Investor categorisation affects not only which investments investors can access but also which investments can be promoted to them and how. You can read more from us about the FCA’s proposed changes to the elective professional client regime here.

One key area of concern for the FCA is the stagnation of the threshold for the high net worth individuals exemption under the Financial Promotion Order (FPO), which can be used by unauthorised persons to promote certain investments and has remained unchanged since 2001. While this threshold is for HM Treasury to determine, the FCA invited feedback on ways it could mitigate consumer harm in this area. Some respondents also noted that the self-certification process under the FPO exemptions could easily be abused in its current form. 

The FCA noted that it will continue to engage with HM Treasury to address these issues.

Financial promotions

The FCA recognised that, because its financial promotion categories are drawn widely, products carrying comparable risks can face varying levels of friction and control. Other areas of inconsistency included speculative products and long-term investments sometimes being categorised alongside one another. In response, the FCA intends to revisit how it classifies high-risk investments, working with stakeholders to gauge the extent of any detriment these anomalies cause to consumers and to test whether alternative approaches would serve them better. 

It was also highlighted that risk warnings are broadly applied and focus heavily on the negatives of investing, with little focus on the potential upside. While the FCA published its expectations for risk warnings in December 2025 (Risk warnings for mainstream investments | FCA), it recognises that firms can still be focused on strict compliance at the expense of consumer understanding, and so it plans to consult further on risk information for mainstream investments in H1 2027. 

Pre-sale product and service communications

Following the introduction of the Consumer Composite Investments (CCI) regime for packaged products, the FCA is looking to simplify product and service disclosures more widely, as set out in its July consultation (CP26/24), and expects to publish final rules by the end of 2026. 

You can read more about the CCI regime in our separate article here. The CCI regime will come into full force on 8 June 2027.

Model portfolio services (MPS)

Under the current regime, an MPS is treated as a discretionary management service. However, there is a question as to whether investing through an MPS is conceptually more akin to investing in a fund than to receiving a service. 

The FCA asked whether MPS should be regulated more like other managed products and respondents stated that consumers see multi-client managed MPS as ‘off-the-shelf’ investment propositions, often assuming that MPS and packaged products are subject to the same or similar regulatory requirements. 

There was also wide support for bringing MPS disclosures into line with the CCI regime, which respondents felt would make it easier for consumers to compare options. Others, however, questioned whether a uniform approach would work in practice, given how much MPS propositions can differ from one another.

The FCA has begun its multi-firm review into whether firms manufacturing MPS are achieving good outcomes for consumers. Firms operating in this space should keep an eye out for the review findings expected by Q1 2027. 

Pre-sale assessments

The FCA welcomed feedback on pre-sale assessments and still sees effective appropriateness checks as essential where consumers buy complex or high-risk products without advice, since many people overestimate how well they understand these investments. 

Given the number of issues that were raised in feedback, the FCA will undertake a review into how the checks work in practice, explore alternative models and engage with various stakeholders before committing to any rule changes. 

Looking ahead

Fundamentally, the FCA is seeking to encourage safe consumer investment through better support, a clear separation between mainstream and high-risk investing, and clear, consistent rules. 

Firms should look out for the final rules on simplifying consumer investment disclosures, due by the end of 2026, and subsequently for the rest of the consumer investments policy roadmap set out in the feedback statement.

Written by Christian Wade and John Roberts

As consumer behaviour, needs and expectations change, we need to ensure our regulation is proportionate and helps to build a stronger investment culture in the UK.

https://www.fca.org.uk/publication/feedback/fs26-3.pdf