Key takeaways from CP26/10: Simplifying pensions and investment

What happened?

Following its inaugural Regulatory Priorities report for Consumer Investments, the FCA has published its much-anticipated consultation on simplifying pensions and investment advice rules, with a Policy Statement expected in Q4 2026.

The consultation sets out three main proposals. First, replacing COBS 9 and COBS 9A with a single new chapter, COBS 9C, covering basic, simplified, comprehensive and ongoing advice (targeted support rules remain in COBS 9B).

Second, replacing the requirement to obtain “necessary” information with an expectation to take account of “sufficient” information, so firms gather only what is genuinely needed to demonstrate suitability rather than defaulting to a comprehensive fact-find regardless of scope.

Third, removing the mandatory annual assessment rule for ongoing advice, giving firms flexibility over how frequently periodic reviews take place, alongside lower charges for less frequent reviews.

Why does it matter?

The proposals will have a material impact on the business models of all wealth management firms. Firms advising across different product types currently maintain parallel processes to comply with different rule sets, and consolidating them into COBS 9C means existing policies and procedures will need to be mapped across before the new rules take effect.

The consultation also gives further detail on the FCA’s expectations for client disengagement processes, placing significant onus on firms to design these consistently with the Consumer Duty rather than relying on new prescriptive rules.

Who is affected?

All wealth management firms providing advice on investments and pensions, particularly those operating ongoing advice or service propositions with periodic review charges.

Key risks

• Policies and procedures not being mapped from COBS 9 and 9A to the new COBS 9C structure before it comes into force.
• Defaulting to comprehensive fact-finds rather than proportionate, “sufficient” information gathering.
• Fair value assessments and disengagement processes not being ready ahead of the FCA’s multi-firm work on ongoing advice.

Actions to take

1. Read the consultation and map existing COBS 9 and 9A policies and procedures to the proposed COBS 9C structure.
2. Design differentiated advice processes based on client complexity, collecting only “sufficient” know-your-customer information.
3. Review periodic review frequency and client disengagement processes for consistency with the Consumer Duty.
4. Check current fair value assessments are compliant ahead of the FCA’s multi-firm work on ongoing advice.

Wider implications

The changes reflect a wider FCA move towards a less prescriptive rulebook, placing more onus on firms to design their own compliant processes consistent with the Consumer Duty rather than following new detailed rules.

Recommendations

TCC’s regulatory experts can talk firms through the CP26/10 proposals and give practical steps to take before the new rules come into force and go live.