Money Covered: The Week That Was – 12 December 2025

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The fourth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at Employment Practices Liability insurance and its relationship to Directors & Officers insurance, is now available.

To listen to this and all previous episodes, please click here.

Headline development

FCA streamlines insurance rules as Consumer Duty settles in

The Financial Conduct Authority (FCA) has confirmed changes designed to simplify insurance regulation and reduce compliance costs for insurers, whilst maintaining appropriate levels of protection for smaller commercial customers.

Under the rules, insurers and intermediaries will have greater discretion over how often they review products and how much continual professional development (CPD) staff are required to complete, encouraging a more outcomes-based approach. These changes all form part of a post-Consumer Duty and post-Brexit recalibration, with the FCA signalling plans to remove more than 100 pages of legacy insurance guidance from the Handbook to streamline the regime.

The FCA also intends further amendments next year, such as reviewing international rule application and technical Consumer Duty adjustments where obligations may be duplicative or overly complex. Industry bodies have broadly welcomed the direction of travel but urged clarity on how the new framework will apply in practice, particularly concerning overseas business and the scope of conduct rules.

To read FCA's policy statement of simplifying the insurance rules, please click here.

Accountants

IFoA withdraws Actuarial Profession Standard (APS) L2

In November 2025, the Regulatory Board of the Institute and Faculty of Actuaries (IFoA) decided to withdraw Actuarial Profession Standard L2: The Financial Services and Markets Act 2000 (Communications by Actuaries) Regulations 2003. APS L2 summarises various obligations placed on members working in life insurance. These obligations arise from the Financial Services and Markets Act 2000 (Communications by Actuaries) Regulations 2003, as well as from rules issued by the FCA and PRA.

The IFoA has justified the change on the basis that no significant issues have arisen in this area of work since APS L2 was introduced in 2011, and that APS L2 does not impose obligations beyond those already placed on members by the UK government, FCA, or PRA. The Regulatory Board therefore does not believe that withdrawing APS L2 would pose a significant risk to the public interest. APS L2 will be withdrawn from 23 January 2026.

To read the IFoA's announcement, please click here.

Pensions

TPR publishes revised administration guidance for trustees

The Pension Regulator has published revised administration guidance designed to help schemes and their administrators deliver high-quality services that safeguards member benefits and build trust in the pensions system by ensuring the accurate, timely, and secure administration of pension benefits. The regulator has consolidated its administration expectations in recognition that administration is now a "critical driver of good outcomes" rather than a "back-office function".

The guidance replaces the previous  "Administration of a DC Pension Scheme" guidance and will apply to all scheme types. It sets out the expectations of trustees and managers on key administration activities including member communications, data management, disaster recovery and business continuity planning.

 The guidance introduces several new elements such as:

• Calling out the importance of having a policy to plan administration and having robust arrangements in place to enable the effective oversight of outsourced or in-house administration.
• Introducing guidance on IT system governance, including assurance on system adequacy, change control processes, technological benefits with proper oversight, and regular backups; and
• Broadening performance measurement beyond time-based commitments for a true reflection of the quality and accuracy of the administration service.

To read the revised administration guidance, please click here.

Government promises statutory guidance on trustees' fiduciary duties in investing

At the report stage and third reading of the Pension Schemes Bill, the pension minister, Torsten Bell MP, announced that the government intends to bring forward legislation that will allow it to develop statutory guidance on fiduciary duties for the trust-based private pensions sector.

Bell acknowledged that there has been a "long-running debate" on the scope of trustees’ investment duties and their interpretation of the same when making investment decisions and confirmed the guidance will provide practical support to trustees about how to comply with their fiduciary duties in considering wider factors, including systemic risks (such as climate risk) and members’ standards of living. However, he noted that "this is about giving trustees that ability and not specifying that they must do so".

In doing so the Government aims to give trustees added confidence that they can invest in the long-term interests of their members and society. The government will set out more details on its guidance plans in a matter of months.

To read a news article on this, please clickhere. 

Regulatory developments for FCA regulated entities

FCA announces proposals to boost UK investment culture

The FCA has announced what it described as a "landmark package" to boost UK investment culture.

The proposals focus on encouraging investment in the UK by giving firms greater confidence when it comes to classifying retail and professional investors. For retail customers, the FCA suggests moving away from prescriptive and complex templates and instead providing customers with material that informs and engages them, with a view to shifting the dial on risk appetite. The FCA has also sought views on how, in an evolving retail investment landscape, long-term regulation can keep pace.

The FCA proposes setting a clearer boundary between retail and professional investors, drawing a line between the two so that wholesale markets can remain agile and innovative. The intention is to give firms more confidence when dealing with professional investors outside retail regulations. The proposals state that, to be classified as a professional investor, the threshold will remain high, and that wealthy and experienced investors would have the option to opt out of retail regulations.

The FCA’s executive director of markets, Simon Walls, said that the proposed measures support investment risk culture across the spectrum.

To read the FCA's announcement, please click here.

FCA sets out expectations for firms collaborating to manufacture financial products and provide services

On 8 December 2025 the FCA set out its expectations for firms that collaborate with each other to manufacture financial products and services. The statement does not introduce any new rules or regulations but instead provides firms with clarity on how the relevant rules (such as the Consumer Duty, PROD, and Principles for Businesses) should be interpreted and applied.

In addition, the statement provides examples of good and bad practice in the context of collaboration with other firms.

• Examples of good practice include: unambiguous allocation of manufacturer responsibilities; robust governance and Senior Management accountability; clearly defined target markets; thorough fair value assessments; effective information‑sharing across partners; oversight of distribution; pre‑ and post‑launch testing; ongoing monitoring of customer outcomes; timely remediation and redress; and comprehensive documentation and audit trails.
• Examples of bad practice include: vague roles and reliance on partners without challenge; weak product governance; inadequate data‑sharing; superficial or missing value assessments; misaligned remuneration; insufficient oversight of appointed representatives and third‑party distributors; limited outcome monitoring; and reactive fixes that ignore root causes.

The FCA stresses that collaboration must not dilute accountability and that firms must remain responsible for delivering and evidencing good outcomes, including fair value. Boards are also expected to resource, challenge and oversee these arrangements.

To read the Statement, please clickhere.

FCA considers bringing in standardised disclosure for model portfolios

On 8 December, the Financial Conduct Authority (FCA) launched a suite of consultation papers to “boost investment culture in the UK”, with a key focus on harmonising disclosure and regulatory treatment between model portfolio services (MPS) and authorised funds. Whilst MPS have grown popular among retail investors by offering easier access, the FCA notes they face similar risks to authorised funds but are not subject to equivalent conduct of business or product disclosure requirements. This makes it harder for consumers to compare options and understand risk

The watchdog is seeking feedback on standardising disclosures to enable clearer comparisons of risks, costs and opportunities, and exploring outcome based rules alongside the Consumer Duty for MPS design and management (e.g. investment powers, liquidity and fair order handling). The FCA also signals a desire to improve efficiency and reduce duplication for firms operating both funds and MPS without curbing innovation.

To read FCA's press release on this, please click here.

With thanks to this week's contributors: Daniel Parkin, Dorian Nunzek, Damien O'Malley, Ben Simmonds, Haiying Li, James Parsons, and Lauren Butler