FCA CP26/10: SIMPLIFYING THE PENSIONS AND INVESTMENT ADVICE RULES — WHAT YOU NEED TO KNOW

On 25 March 2026, the FCA published Consultation Paper CP26/10: Simplifying the Pensions and Investment Advice Rules. This paper builds on the long-running Advice Guidance Boundary Review (AGBR) and covers four distinct but interconnected areas: 1) the new targeted support regime (already live), 2) proposals for a new simplified advice framework, 3) a discussion about the future of pre-RDR trail commission, and 4) relaxing rules on annual suitability reviews.

1.    Targeted support

Targeted support is a new form of consumer-facing support that sits between generic financial guidance and full regulated advice. It allows firms — primarily aimed at pension schemes, insurers and investment platforms — to make suggestions to groups of consumers sharing similar characteristics, without that support constituting a personal recommendation triggering full suitability requirements.

Under targeted support, a firm can identify a group of consumers with shared characteristics (for example, pension scheme members approaching retirement who have not yet taken any action) and suggest a course of action appropriate for that group. It is a new regulated activity which requires permission from the FCA, and firms must be FCA-authorised to provide it. Firms providing it must:

• Have a reasonable basis for believing the suggested action is appropriate for the identified group.
• Be clear with consumers that targeted support is not personalised advice.
• Maintain adequate records to demonstrate the group identification and the basis for the suggestion.
• Act in consumers’ best interests and avoid foreseeable harm.
• Maintain sufficient financial resources, including meeting applicable minimum regulatory capital.

Our current position is that, as an advised platform, we will not be offering this to clients. Whilst these measures are well intended, they add another layer of complexity to the advice-guidance boundary.  Although they have the potential to improve some client outcomes, achieving consistent benefits will rely on appropriate consideration of the relevant circumstances.

However, as with Auto-Enrolment, initiatives that encourage greater participating in investing, or provide support to clients who may be less commercially viable for advisers to serve, are likely to have a positive impact on the adviser profession over the longer term.

2.    Simplified Advice — CP26/10 Proposals

The FCA’s longstanding concern is that the cost and complexity of providing regulated advice has led to an “advice gap” — with an estimated 23 million consumers underserved by the existing advice/guidance framework.

CP26/10 proposes a new simplified advice framework, consolidating existing COBS rules into a single, more principles-based framework allowing firms flexibility to deliver advice proportionate to a perceived client need.

Key features of the proposed framework include:

• Focused scope: Simplified advice would be limited to a defined, straightforward transaction — for example, recommending a consumer starts contributing to a workplace pension, or makes a straightforward ISA investment.
• Proportionate suitability: Firms would only need to gather and assess the information that is relevant to the specific recommendation being made, rather than a client’s full financial picture.
• Streamlined documentation: Record-keeping and disclosure requirements would be calibrated to the simpler nature of the interaction.
• Remains regulated advice: Simplified advice would still constitute a personal recommendation — it is not guidance. Firms would still need to be authorised and meet appropriate conduct standards.

The FCA is clear that simplified advice is not intended for complex cases requiring holistic consideration — for example, cases involving defined benefit pension transfers or complex tax and estate planning.

To date, uptake has been low and whilst these proposals may look superficially attractive, there is a risk that these rules will create a two-tier market in which low-cost simplified advice competes with holistic financial advice.  It does create an opportunity for advice firms to tailor their service offerings to different client bases who may be economically challenging to provide holistic financial advice.

3.    Pre-RDR Trail Commission — Long-running issue returns to the agenda

The Retail Distribution Review (RDR) banned the payment of commission on retail investment products from 31 December 2012. However, the ban applied only to new business from that date. Commission arrangements in place before 31 December 2012 — so-called pre-RDR trail commission — were permitted to continue.

More than thirteen years on, a significant amount of pre-RDR trail commission is still being paid to adviser firms. The FCA has long been concerned about this: consumers may be paying for an ongoing service that is no longer being actively delivered, or where the original adviser relationship has long since ended. In many cases, the client may not even be aware they are still paying trail commission on an old product.

The FCA’s concern is framed around Consumer Duty — specifically, the requirement that firms deliver fair value and act to avoid consumer harm. The paper asks whether the continuation of pre-RDR trail commission is consistent with Consumer Duty obligations, and whether further regulatory intervention is now warranted.

The paper puts forward a number of possible approaches for feedback, ranging from:

• Requiring firms to proactively review pre-RDR trail arrangements and assess whether they remain consistent with Consumer Duty fair value requirements.
• Introducing a switching service or redirection mechanism so that consumers who are still paying trail commission to a firm they no longer have a relationship with can more easily move to a different arrangement.
• Considering whether a further ban or wind-down period for remaining pre-RDR trail commission should be introduced.

The FCA has signalled that final rules on simplified advice will follow in due course. Firms wishing to contribute have until 22 May 2026 to make a submission. Firms may also want to contribute to the discussion on trail commission, ahead of any future consultation paper.

All information is based on our understanding and interpretation of applicable law and regulation which is subject to change. Tax treatment depends on individual client circumstances and may change in the future.

FCA CP26/10: Simplifying the pensions and investment advice rules