FCA Proposes Simplified Cost Disclosure Rules for UK Wealth Managers
What Happened
The UK Financial Conduct Authority (FCA) has launched a consultation (CP26/24) on simplifying investment cost disclosure rules for platforms, advisers, and wealth managers. The proposals aim to replace existing PRIIPs and UCITS regimes with a new Consumer Composite Investments (CCI) format, requiring firms to communicate costs in plain English and present information in engaging ways to help consumers compare products and understand the impact of costs on returns.
The FCA's review found that only 6% of current disclosure documents are written in plain English, and all were more complex than GCSE level. From June 2025, firms must follow CCI rules for pre-sale disclosures, and from June 2027, plain English requirements become mandatory. The consultation is open until 21 August.
Why It Matters
These changes are part of the FCA's Consumer Duty and aim to foster a resilient, competitive consumer investment market. For compliance teams, the new rules will require significant updates to disclosure processes, documentation, and systems. The shift to plain English and CCI format will reduce complexity but also demand new capabilities in content creation and regulatory reporting. Firms must also ensure alignment with broader UK wealth management compliance obligations under the FCA's platform regulation framework.
The FCA investment disclosure overhaul is a key priority for 2025-2027, and firms that start preparing early will have a competitive advantage. Non-compliance could lead to regulatory action and reputational damage.
What Organizations Should Do
- Review current disclosures: Assess existing cost disclosure documents against CCI format and plain English requirements.
- Engage with the consultation: Submit feedback to the FCA by 21 August to shape final rules.
- Plan implementation: Develop a roadmap for adopting CCI rules by June 2025 and plain English by June 2027.
- Invest in compliance tools: Consider platforms that can track multi-domain regulatory changes and automate disclosure updates.
To streamline compliance across evolving regulations, AIGovHub's continuous compliance monitoring tools can help wealth management firms track FCA requirements alongside other regulatory obligations, reducing risk and operational burden.
Related Resources
This content is for informational purposes only and does not constitute legal advice.