behaviour” when firms know, or should know, that potential liabilities exist. The FCA has been clear that it will take action where it suspects this behaviour exists.
The intention to sell a client bank is also typically a SUP 15 notifiable event. Given Principle 11“ A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice”, it is difficult to envisage scenarios where notification would not be required.
Preparing for a change in control notification
Depending on how the sale is being structured, this may also trigger the need to seek regulatory approval through a change in control process. It’ s important to understand what forms and documents will be required and prepare in advance, as the quality of the submission and its ability to allay any fears the regulator may have, will influence the speed of any decision to either acquire, cease or reduce control. The change in control process also looks to gain an understanding of the acquisition process, due diligence undertaken, risks identified and mitigation put in place. Change in Control applications can be quite complex and support is available in this area from our Authorisations Support Team.
Consumer Duty: Avoiding foreseeable harm
For advisers navigating consolidation, whether as buyer or seller, the message is simple: doing nothing is not an option. Firms should review and benchmark themselves against the FCA’ s findings, strengthen governance where required and ensure board level accountability for client outcomes.
For anyone considering a sale, reviewing your business now to ensure that suitable controls and arrangements are in place will make any due diligence exercise more straight forward and add‘ saleability’ to a business, increasing its value in the market.
As a Simplybiz member, you have access to a wide range of services that can assist in ensuring that your business is not being exposed to any undue risk which could impact on future saleability. We can work alongside you, reviewing your current systems and controls to provide an expert opinion on your existing framework and provide a detailed report and action plan for any areas requiring attention. We can also build a bespoke ongoing support package to help you mitigate any established risks, potentially with file reviews, centralised investment proposition or training and competence support to ensure any business sale does not raise any nasty shocks.
In a regulated environment, compliance is not just about avoiding enforcement. It is fundamental to building sustainable businesses that deserve to grow in a safe manner and Simplybiz is there to help you achieve that.
Under the Consumer Duty, both buyers and sellers must act in good faith, avoid foreseeable harm and support good client outcomes. This means a selling firm cannot simply focus on price or exit strategy. It must consider whether clients will be disadvantaged by the transfer and undertake appropriate due diligence on the buyer’ s service proposition. We are seeing more vendors now taking a vested interest in buying firms’ propositions, resource capabilities, regulatory history and future plans. Firms should evidence that client outcomes were central to decision making at all stages.
View compliance as an enabler, not a barrier
The FCA has been clear that its feedback does not introduce new rules but reinforces existing expectations whilst remaining“ agnostic” on whether consolidation is good or bad. The expectations are clear however, growth must be well controlled, financially resilient and focused on good client outcomes. Compliance, risk and governance are not obstacles to consolidation; they are enablers of resilient, well-managed growth.
How can Simplybiz support you?
If you would like to find out more about the support that Simplybiz can offer in this area, please contact the Compliance Support Team below.
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February 2026 | 19