The Financial Conduct Authority is consulting on removing the annual client review requirement for financial advisers who provide ongoing pensions and investment services.
In consultation paper CP26/10, released this morning, the FCA outlines plans to simplify the rules for pensions and investments advice.
It said it wants to enable firms to better tailor their ongoing advice services.
The consultation paper detailed plans to moving from requirements to offer annual to periodic suitability reviews and clarifying that firms can charge fees for both personal recommendations and related services on an ongoing basis.
The regulator explained: “We want to enable advisers to offer a broader range of ongoing advice services, with a range of fees to meet different clients’ needs." The move is part of its ongoing plans for simplified advice.
It added: “While the rule changes we are proposing to make may be small, our ambition isn’t. We want to work closely with industry to collectively reframe how simpler advice propositions can be offered to consumers.”
While the regulator recognised the importance of regular suitability reviews, it said that many clients may not need this on an annual basis and that reducing the frequency could also lower the cost of advice.
The regulator added that advisers have told it that firms struggle to design commercially viable simplified advice models due to being unable to tailor their ongoing services to reflect customer needs because of current regulatory requirements for annual reviews.
Under new rules advisers would be able to determine how often they carry out reviews with clients, based on an assessment of customer needs and in keeping with Consumer Duty.
The watchdog said that going forward its focus would be on ensuring firms’ ongoing service offerings comply with Consumer Duty and that it will, “monitor regulatory returns and complaints data, identifying outlier firms and conduct multi-firm reviews.”
The regulator also plans to carry out consumer research and work with advice firms to assess the impact of dropping the annual review requirement. It will also look at the legacy position of trail commissions which were charged on some investment products up to 2012 and may still be charged on pre-2012 sales.
It has called for feedback on whether the proposed changes would, “provide sufficient safeguards” with firms who decide to offer less frequent reviews but do not lower their pricing as a result.
In the FCA’s findings from its review of ongoing advice in February 2025, it found that suitability reviews were delivered annually in 83% of the cases it looked at, with 15% of clients either declining or not responding to an offer of a review.
Following a more in-depth review of the 20 largest advice firms by the regulator, several made large provisions for potential client refunds around ongoing advice.
So far Quilter has paid out £14m in client refunds under its ongoing advice review remediation programme and expects to pay another £56m, according to its most recent financial results.
St James’s Place also set aside £426m for potential client refunds after a review of ongoing advice. In its 2025 financial report SJP said that its historic ongoing service evidence (OSE) review was “progressing at pace” and there was an £18.7m post-tax additional release from the OSE provision at year-end, bringing the total released during 2025 to £82.1m. It anticipates completing the review this year.
Network Openwork has also set aside £2.4m for ongoing advice refunds, according to its latest financial statements.