What the FCA's simplified advice proposals mean for your firm

Ask ten advisers what they make of the FCA's simplified advice proposals and you'll get a familiar split. Most welcome the direction. Plenty doubt it'll change much in practice. A survey of advisers published by AJ Bell at the start of June found exactly that pattern: broad support for simpler, more proportionate advice, paired with real uncertainty about how it plays out day to day.

That uncertainty is fair. The detail still has to land. But there's already enough in the consultation to start preparing, and one proposed change in particular deserves more attention than it's getting.

What's actually on the table

The FCA set out its plans in CP26/10, published in March, with the consultation closing on 22 May. The aim is to make it easier for firms to offer simplified, individual advice to people with more straightforward needs, without a full assessment of their whole financial situation.

Four changes sit at the centre of it:

• A single, consolidated suitability framework, instead of separate sets of rules to work across.
• Clearer flexibility on how much information is "enough", with an expectation that advisers gather sufficient information rather than exhaustive information.
• More proportionate suitability communications, so reports can be concise and focused on what the client needs to understand.
• More freedom in how firms design ongoing advice, including a move away from a fixed annual suitability review towards periodic reviews based on a client's actual needs.

The change to watch

That last point is the one to sit with. The annual review has been a fixed marker in the calendar for most advice firms for years. It shapes capacity planning, fee models, and a large share of the admin load.

If firms gain the freedom to review some clients on a rhythm that fits their circumstances, rather than a date set twelve months ago, that isn't a small tweak. It changes how a firm services clients across a whole year.

It also raises a question that has nothing to do with regulation: would your systems even know which clients need a review, and when? Moving from "everyone, once a year" to "the right client, at the right time" only works if you can see client needs clearly. A calendar reminder set last spring can't tell you that.

What isn't changing

Two things aren't changing, and that matters.

Qualification standards for advisers stay as they are. And the adviser charging rules stay in place: advice still has to be paid through agreed adviser charges, not provider commission. The FCA has separately opened a discussion on the future of trail commission, which is one to keep an eye on, but the core charging model isn't being unpicked here.

So this isn't a reason to tear up how your firm works. It's a reason to look closely at the parts of it built on habit.

What's worth doing now

Not a scramble. The rules aren't final, and the foundations are steady. The useful work right now is quieter.

Take an honest look at how much of your current process assumes things that might soon loosen. How much of your annual review cycle reflects genuine client need, and how much is simply habit? How much of your suitability documentation is proportionate, and how much is length for its own sake? And where your client information actually lives, could you trust it to tell you who needs attention next?

Firms that can answer those questions calmly will adapt to whatever the final rules say far more easily than firms relying on a fixed calendar and notes scattered across inboxes and drives. These proposals tend to reward firms that already understand their clients well. The better and more current your view of each client, the more freedom these changes are likely to hand you.

Simplified advice won't suit every client or every firm. Complex situations, like drawing retirement income from several sources, will still call for comprehensive advice. But the direction is set: more proportionate, more flexible, more focused on real need. The firms that gain the most will be the ones whose day-to-day systems already work that way.

If you're weighing up what this means for your own processes, we're happy to talk it through.