FCA CP26/28: What the AIFM regime reforms mean for wealth managers and firms

What happened?

Why does it matter?

Although implementation is not currently envisaged until 2028, the consultation provides an important indication of the FCA’s regulatory direction. The proposals reflect a broader regulatory trend towards proportionate regulation, improved governance, better quality reporting and stronger evidence-based decision-making. Firms should view the reforms not just as an asset management issue, but as part of a wider shift towards demonstrating effective oversight and customer outcomes.

Who is affected?

The reforms will directly affect UK-authorised and UK-registered AIFMs, firms marketing alternative investment funds in the UK, depositaries, prime brokers, delegates of AIFMs and investors in alternative investment funds. However, wealth managers, advisers and governance teams may also see indirect impacts through changes to the reporting, disclosures and governance information provided by asset managers.

Key risks

• Missing early signals about future regulatory expectations and governance standards.
• Failing to assess how reporting and disclosure changes could affect due diligence processes.
• Reliance on governance and management information that may not evolve in line with regulatory expectations.
• Insufficient consideration of how future reporting enhancements could support Consumer Duty oversight.
• Governance committees being unprepared for changes in the wider regulatory landscape.

Actions to take

1. Monitor consultation developments and implementation timelines.
2. Engage with asset management providers to understand potential reporting and disclosure changes.
3. Review how current provider information supports governance, due diligence and oversight activities.
4. Assess whether future reporting enhancements could strengthen Consumer Duty monitoring.
5. Keep governance committees informed about the likely direction of regulatory travel.
6. Track developments in both FCA reforms and related Treasury legislative changes.

Wider implications

The consultation reinforces the FCA’s broader focus on simplifying regulation while maintaining regulatory outcomes. Across multiple supervisory themes, firms are increasingly expected to demonstrate how governance bodies use management information to identify risks, challenge assumptions and evidence decision-making. Improved reporting and oversight information could help firms strengthen governance frameworks, value assessments, product oversight and Consumer Duty reviews. However, simplification should not be mistaken for reduced accountability. Firms will still be expected to demonstrate sound judgement, effective controls and robust governance.

Recommendations

The consultation closes on 14th October 2026, with implementation currently envisaged for 2028 following consultation feedback, a further FCA consultation on remaining areas, final rules and associated Treasury legislative reforms.

In the meantime, firms should consider:

• Monitoring consultation developments and implementation timelines
• Engaging with key asset management providers to understand potential changes
• Reviewing how provider reporting currently supports governance and due diligence activities
• Assessing whether future reporting enhancements could strengthen Consumer Duty oversight
• Keeping governance committees informed about the likely direction of travel