What happened?
FCA Deputy Chief Executive Sarah Pritchard, in her address to the Investing and Saving Alliance (TISA) conference, outlined the regulator’s vision for a more tailored approach to financial wellbeing. Emphasizing that consumer needs are increasingly complex, Pritchard urged the industry to move beyond ‘one-size-fits-all’ products and support consumers in fully understanding options for funding later life.
This fits into a broader strategy to drive growth by encouraging consumers to transition from low-interest cash deposits to equity-based investments. The government supported this direction in the November 2025 Budget by announcing ISA system reforms to take effect from April 2027.
Why does it matter?
The regulator is challenging firms to actively re-educate consumers. Firms must move away from standard, passive disclaimers like ‘capital at risk’ and instead engage in proactive conversations about the benefits of investing. Under Consumer Duty, firms must demonstrate that they are actively helping clients meet their financial objectives and achieve good outcomes.
This requires proving value through concrete criteria, such as tracking cash-to-asset ratios, providing holistic financial solutions (including borrowing and protection), and showing how interactions mitigate vulnerability.
Who is affected?
This guidance applies directly to financial advisers, wealth management firms, and consumer-facing financial services providers seeking to implement targeted support models.
Key risks
- Unjustified Cash Holdings: Failing to monitor or justify why high proportions of customer assets remain in cash under rising inflation.
- Failing vulnerable clients: Inability to prove that communications are tailored to customer vulnerabilities, resulting in poor outcomes.
- Retrospective compliance: Relying on passive, post-event checklists rather than active, data-led oversight.
Actions to take
- Review Asset Allocations: Identify the proportion of customer assets held in cash and establish clear, documented rationales for these positions.
- Reform Client Communications: Upgrade suitability reports and promotions from passive warnings to active educational tools.
- Build Evidential Data: Develop quantitative and qualitative measures to prove how clients are financially better off under your services.
- Leverage Compliance Tech: Deploy speech analytics and interaction monitoring to identify vulnerabilities and surface risk at scale.
Wider implications
The regulatory expectation is clear: ‘Show me, don’t tell me.’ As data-led oversight intensifies, firms must be capable of providing real-time evidence of the value and outcomes they deliver.
Recommendations
Firms should proactively audit their Consumer Duty MI matrix and deploy intelligent RegTech solutions to monitor client interactions and ensure tailored, compliant support.
Supporting sources
Frequently asked questions
What is the FCA's core message on financial wellbeing?
The regulator demands that firms move beyond generic approaches, providing tailored support and active re-education to help consumers understand their options.
How do ISA reforms from the November 2025 Budget affect this strategy?
Beginning April 2027, the ISA system will reserve £8,000 of the £20,000 allowance exclusively for investment, pushing advisers to help clients adapt quickly.
How can firms demonstrate they are delivering fair value?
Firms should track clear criteria, such as the proportion of client assets in cash, the delivery of holistic services, and the quality of vulnerable customer outcomes.
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