FCA Consumer Investments Regulatory Priorities 2026: Suitability, Scams and the Private Markets Access Debate
Credit: Which?
The FCA's consumer investments priorities sit at the intersection of three live debates: access to private markets, investment fraud, and the appropriate role of AI in investment decisions.
Context:
The FCA published its Consumer Investments Regulatory Priorities report in March 2026 as part of the new annual sector framework. It addresses platforms, discretionary managers, investment advisers, stockbrokers, and other firms in the retail investment sector.
The consumer investments sector is navigating significant structural change. The Advice Guidance Boundary Review, including the launch of targeted support from 6 April 2026 and CP26/10's simplification of advice rules, is reshaping how firms can legitimately support consumers. At the same time, investment scams and fraud remain endemic: the FCA's Scam Smart campaign data shows that investment fraud losses remain in the hundreds of millions annually.
The productive finance agenda is creating specific tension in consumer investments: the FCA has signalled that it wants to improve retail access to private markets and alternative assets, but is simultaneously concerned that some firms are not adequately assessing client suitability before recommending complex or illiquid products. Reconciling access and protection is the defining challenge of the sector's regulatory environment in 2026.
Rules and Guidelines:
The FCA's consumer investments priorities for 2026 cover four areas. First, supporting the advice guidance boundary review: firms must be ready to engage with CP26/10's simplification proposals and consider how targeted support, simplified advice, and full advice complement each other within their business model. Firms planning to offer targeted support must have applied for the relevant permission.
Second, combating investment fraud: the FCA expects all consumer investment firms to have robust fraud controls, to actively support the FCA's ScamSmart campaign, and to ensure their financial promotion processes comply with the FCA's 2023 financial promotions regime. Firms must have adequate systems to identify and report suspected investment fraud and to implement the FCA's Consumer Duty obligations around scam protection.
Third, improving suitability and appropriateness: the FCA will continue multi-firm reviews of suitability in discretionary portfolio management and investment advice. Firms must evidence that their investment recommendations, particularly for complex, illiquid, or alternative products, are based on genuine client understanding and documented needs assessment. The use of AI in investment recommendation processes is under FCA observation; firms must ensure that AI tools used in suitability assessments meet the same standards as human processes.
Fourth, access to private markets: the FCA has signalled support for improving retail access to private markets through investment trusts, Long-Term Asset Funds (LTAFs), and the British Business Bank investment pipeline, but expects firms to demonstrate that clients accessing these products understand the liquidity risk and time horizon involved.
Businesses Affected:
Investment advisers, discretionary portfolio managers, execution-only stockbrokers, and investment platforms.
Firms using robo-advice or AI-assisted suitability tools, who face specific expectations around explainability and Consumer Duty compliance.
Firms offering or considering offering Long-Term Asset Funds (LTAFs), investment trusts with private asset exposure, or other illiquid alternative products to retail clients.
Financial promotions teams and compliance functions are responsible for reviewing and approving investment marketing under the 2023 financial promotions regime.
Next Steps:
Review targeted support and simplified advice readiness. If your firm intends to offer either, ensure permissions are in place and systems, training, and governance are designed to the FCA's CP26/10 specifications.
Conduct a financial promotions audit under the 2023 regime. Particular attention should be paid to social media and digital channels, where the FCA has identified persistent non-compliance.
Review suitability processes for complex and illiquid products. Ensure client fact-finds explicitly address investment objectives, time horizons, liquidity needs, and capacity for loss and that this information is documented.
If offering private market products, ensure client communication clearly explains lock-up periods, valuation uncertainty, and the difference between listed and unlisted asset performance characteristics.
Establish AI governance documentation for any AI-assisted suitability or recommendation tools. This should address how the AI's outputs are validated, how Consumer Duty outcomes are monitored, and how human oversight is maintained.
Source | Financial Conduct Authority | Regulatory Priorities - Consumer Investments
