FCA CP26/10: Simplifying Pensions and Investment Advice Rules
The FCA's most significant reform to investment advice rules since MiFID II implementation, a single COBS framework, periodic suitability, and trail commission are on the discussion table.
Context:
On 25 March 2026, the FCA published Consultation Paper CP26/10: Simplifying the Pensions and Investment Advice Rules, the next step in the Advice Guidance Boundary Review (AGBR) following the go-live of targeted support on 6 April 2026. The consultation closes on 22 May 2026, with the FCA aiming to publish a Policy Statement in Q4 2026. The changes will fundamentally reshape how advice and ongoing services are governed in the FCA Handbook.
The AGBR has been one of the most significant regulatory projects of recent years, aimed at closing the 'advice gap', the reality that millions of UK consumers with savings and pensions receive no professional financial guidance at a point where they need it most. The previous regime, where advice rules were split across COBS 9 (MiFID investment advice), COBS 9A (insurance-based investment products and pensions), and various other sourcebook provisions created unnecessary complexity without delivering better consumer outcomes.
CP26/10 was one of two commitments the FCA made alongside targeted support: to simplify and consolidate advice rules, and to review ongoing services obligations. Both are addressed in the consultation, which represents a shift from detailed, prescriptive requirements toward principles-based, Consumer Duty-aligned outcomes.
Rules and Guidelines:
The consultation proposes four principal changes. First, a single suitability framework in new COBS 9C: the existing COBS 9 (MiFID investments) and COBS 9A (insurance-based products and pensions) rules are consolidated into a single set of requirements, removing the distinction between product types that has created compliance complexity for firms advising across multiple product categories. Consumer Duty rules will absorb several existing prescriptive requirements, with COBS 9C providing the framework for remaining obligations.
Second, flexible suitability review requirements: the current mandatory annual suitability assessment for ongoing advice clients is replaced with a periodic review obligation calibrated to the client's individual circumstances.. Firms must demonstrate that their review cycle is consistent with Consumer Duty obligations. This represents a significant operational change for advisers currently running annual review programmes.
Third, removal of 'necessary information' rule: the current requirement that advisers obtain 'all necessary information' is replaced with an expectation-based standard, giving firms more flexibility in how they design fact-find processes for different client types and advice scopes. This is particularly significant for limited-scope and simplified advice models.
Fourth, discussion chapters on trail commission and professional client suitability: the FCA is inviting early feedback (not consulting on proposals) on whether trail commission paid to advisers for non-advised distribution should be reviewed, and on how suitability requirements should apply to professional clients.
Businesses Affected:
Financial advisers (IFAs, restricted advisers, and employee benefit consultants) face both simplified rule structure and changed ongoing service obligations.
Wealth managers and discretionary portfolio managers with large ongoing advice client books, where the shift from mandatory annual to periodic suitability reviews has material operational and commercial implications.
Life insurers, pension providers, and wrap platform operators whose product governance is shaped by the COBS 9A requirements are being consolidated into COBS 9C.
Next Steps:
Respond to CP26/10 by 22 May 2026. The consultation includes specific questions on trail commission and professional client suitability, where early engagement will shape the FCA's final thinking.
Map your current COBS 9 and 9A compliance documentation against the proposed COBS 9C single framework. Identify where the consolidation simplifies processes and where the shift to Consumer Duty alignment creates new governance requirements.
Review your ongoing service model against the flexible periodic review proposal. If your current annual review programme is driven by regulatory prescription rather than client need, assess whether the proposed framework allows a more efficient and outcomes-focused approach.
Engage compliance and adviser teams on the practical implications of the 'necessary information' expectation change. Simplified fact-find processes for limited-scope advice will need to be designed and tested before Q4 2026 rules arrive.
Monitor the trail commission discussion chapter carefully. If the FCA ultimately proposes rule changes in this area, it could have significant commercial implications for distribution models across the retail investment market.
Source | FCA | Simplifying Pension and Investment Advice
