On 25th March the FCA published the consultation paper CP26 / 10: Simplifying the pension and investment advice rules, which outlined how the regulator would be consulting on firms being able to give more simplified forms of advice to consumers. CP26 / 10 is a wide-ranging paper which seeks stakeholder feedback on a proposed simplification of the current rules on pensions and investment advice, which are found in the Conduct of Business Sourcebook( COBS).

Key points:

● The FCA is proposing to simplify existing suitability rules within COBS, making them less complex and easier to apply.

● There will be a shift away from prescriptive, detailed requirements towards a more principles-based regulatory approach.

● The changes aim to reduce regulatory burden while still maintaining strong consumer protection standards.

● A significant proposal is to remove the mandatory annual suitability review requirement.

● Instead, firms would adopt a more flexible, clientcentric approach, carrying out periodic suitability reviews based on individual client needs and circumstances.

● This reflects a move towards outcome-focused regulation, giving firms greater discretion in how they meet suitability obligations.

The need for ongoing suitability reviews was introduced in 2018 under MiFID II and IDD legislation with the requirement being that if a firm is providing ongoing advice services to a client in relation to business that falls under MiFID II or the IDD then periodic suitability assessments must take place at least once a year.

Paul Bruns Compliance Director, Simplybiz

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