Since its introduction in July 2023, the FCA’s Consumer Duty has moved from a major implementation exercise to a defining force shaping how wealth management firms operate, evidence value, and engage with clients.
Recent FCA updates, particularly its 2025–2026 focus areas and supervisory messaging make one thing clear: the regulator’s attention has shifted from whether firms are compliant to whether they can demonstrate real customer outcomes.
For wealth managers, this shift has already had a tangible impact across governance, client relationships, and operational models.
A shift from process to outcomes
At its core, Consumer Duty introduced a higher standard of care, requiring firms to prioritise good consumer outcomes across four key areas:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
While initial efforts focused on frameworks and gap analyses, the FCA now expects firms to demonstrate that these outcomes are being achieved in practice.
For wealth managers, this has meant moving beyond policy documentation into ongoing monitoring, testing, and evidence-based decision making.
Stronger focus on fair value
One of the most immediate impacts has been increased scrutiny of fees, charges, and overall value. The FCA has made it clear that firms must be able to justify their pricing through robust, data‑driven value assessments. In wealth management, this has resulted in more frequent and detailed reviews of advisory and platform fees, alongside a greater challenge around ongoing charges applied to inactive or disengaged clients.
Firms are also placing more emphasis on documenting how their services deliver value over time, ensuring this can be clearly evidenced. As a result, many organisations are revisiting their pricing models and strengthening governance frameworks to ensure that value is actively defined, measured, and demonstrated rather than simply assumed.
A cultural shift in client relationships
Consumer Duty has also driven a more proactive approach to client engagement.
Wealth managers are now expected to:
- Deliver ongoing support throughout the client lifecycle
- Ensure clients understand products and risks
- Actively identify and address potential harm
This has reshaped how firms manage relationships particularly in areas like:
- Annual reviews and suitability checks
- Communication clarity and testing
- Engagement with vulnerable or disengaged clients
In practice, firms must now evidence not just that communication was sent, but that it was effective and understood.
Data and MI: From compliance to insight
A defining feature of the FCA’s recent update is the emphasis on management information (MI).
The regulator expects firms to use data to:
- Monitor customer outcomes
- Identify emerging risks
- Take timely corrective action
This has accelerated investment in:
- CRM and data platforms
- Outcome monitoring dashboards
- Customer segmentation and behavioural analysis
Firms are increasingly expected to transform MI from a reporting tool into a strategic capability that drives decision making.
Increased governance and accountability
Consumer Duty has significantly strengthened expectations around senior management responsibility. Boards are now required to take an active role in overseeing compliance with the Duty, including reviewing and approving annual Consumer Duty reports, challenging whether meaningful customer outcomes are being achieved, and ensuring that the principles of the Duty are embedded across the wider business strategy.
The FCA continues to emphasise that firms must demonstrate clear ownership of outcomes at a senior level, rather than treating Consumer Duty as a responsibility confined to compliance teams. For wealth managers, this has elevated Consumer Duty beyond a regulatory obligation, positioning it firmly as a board‑level priority that requires ongoing attention, challenge, and accountability.
Ongoing challenges for wealth managers
Despite progress, the FCA recognises that challenges remain — particularly for wealth management firms operating in complex structures.
Key issues include:
- Interpreting a principles-based framework
Consumer Duty is intentionally non-prescriptive, which has led to variation in how firms interpret and apply it.
Some firms have taken overly cautious approaches, while others are still refining their frameworks.
- Complexity in distribution chains
Wealth managers often operate across platforms, advisers, and product manufacturers, making it difficult to assign clear responsibilities for outcomes.
The FCA’s recent updates aim to clarify expectations in these areas, particularly around co-manufacturing and distribution roles.
- Demonstrating value for diverse client bases
With a mix of retail, high-net-worth, and professional clients, wealth managers must carefully apply Consumer Duty scope and proportionality.
Upcoming consultations in 2026 are expected to provide further clarity on client categorisation and exemptions.
FCA’s direction of travel
The FCA’s latest update signals a clear next phase: embedding, simplifying, and evidencing the Duty.
Its priorities for 2025–2026 include:
- Deepening understanding of good and poor practice
- Increasing focus on outcome monitoring and data
- Simplifying requirements to reduce unnecessary burden
- Using the Duty as a foundation instead of introducing new rules
In short, the regulator is doubling down on Consumer Duty as the cornerstone of conduct regulation.
What this means for wealth managers
So far, Consumer Duty has had a clear and lasting impact on the wealth management sector. It has raised expectations around client outcomes and the demonstration of value, accelerated investment in data, systems, and governance, and driven a broader cultural shift towards more proactive and engaged client care. These changes are no longer theoretical; they are actively reshaping how firms operate and make decisions.
However, the real test is still ongoing. The FCA’s focus has now moved beyond implementation plans and frameworks, placing greater emphasis on tangible evidence that good customer outcomes are being consistently delivered. Firms are expected not only to show intent, but to prove impact, and the regulator has made it clear that it is prepared to intervene where outcomes fall short.
Consumer Duty is no longer a “new regulation”, it is rapidly becoming the operating standard for wealth management in the UK.
Firms that treat it as a compliance exercise risk falling behind. Those that embrace it as a framework for improving client outcomes will be better positioned not just for regulatory scrutiny, but for long-term growth and trust.