Money Covered: The Week That Was – 17 April 2025

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

The third episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team discusses developments that we expect to see in 2025 in relation to Financial Services and Accountants is now available.

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

Headline Development

FCA plans to simplify reporting requirements for 16,000 firms

The FCA has proposed to scrap unnecessary data reporting for 16,000 firms. The regulator has identified three returns that it plans to decommission: The Retail Investment Adviser Complaints Notifications Form; FSA039, Client Money and Assets; and Section F RMAR. The FCA has said that these three returns no longer serve a critical supervisory function. The regulator's move follows its January 2025 letter to the Prime Minister where it committed to streamlining its handbook and reducing the reporting burdens on firms.

In addition to this, the FCA has also opened a consultation on a proposal to decommission certain returns and sections from SUP 16 in the FCA handbook. The changes will impact mortgage, insurance and retail investment intermediaries, alongside investment firms and peer-to-peer lenders. The deadline for providing feedback on its proposals is 14 May. 

To read the consultation, please click here.

IFAs and wealth managers

FCA consolidator review to include private equity owners and offshore debt

 Two emails sent by the FCA to consolidator groups in the past week, and seen by Citywire, have provided insight into the FCA's consolidation review. The consolidator review was first announced in October 2024, having last reviewed advice consolidation in 2017.

The first of these emails revealed that the FCA's work would include looking at the owners of the consolidators, the vast majority of which are private equity firms. It also set out the regulator's clear expectations and asked groups to prepare an organisational chart showing all legal entities, including holding companies.

The second of these emails requested various pieces of information, such as details of the current group structure, a high level overview of the group's strategy for acquiring firms and an overview of the group capital structure, including where debt sits within the group structure (including offshore), the amounts, any guarantees and material covenants.

The FCA has asked firms to provide the information requested by 7 May 2025, though the formal deadline is 4 June 2025.

To read Citywire's report, please click here.

Financial Institutions

Regulator issues warning to banks

 On 12 April 2025, the FCA issued a warning to banks stating that they need to improve on their bereavement and power of attorney policies.

The regulator has found examples of customers struggling to get support during an emergency, and that firms were unclear on the actions that need to be taken to support customers during difficult times. Firms are required to provide good outcomes for customers, including those in vulnerable circumstances, as part of their Consumer Duty obligations. The FCA has specifically stated that: 

"When banks and building societies get it right for their customers they can make a real difference at a difficult time. But when they fail to recognise and respond to customers who need more help, it adds to the stress. All firms should consider where they can make improvements." 

To help firms, the FCA has published examples of poor practice to help firms improve on their existing policies. Areas for improvement include: 

• Firms should have clear guidance for staff on their policies.
• Identify and obtain information from customers that could indicate vulnerability.
• Additional training or competency checks for staff. 

The regulator has also found examples of good practice but has warned that no firm can be complacent in this area. 

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

Regulatory developments for FCA regulated entities

HM Treasury and FCA release record of their perimeter meeting 

On 11 April 2025, HM Treasury released a policy paper documenting a 24 March 2025 meeting between the Economic Secretary to the Treasury (EST) and the FCA Chief Executive. The purpose of this meeting was to discuss the FCA’s regulatory “perimeter” and issues highlighted in the FCA’s December 2024 perimeter report.

Key topics included:

• Non-financial spread betting: These products (e.g. sports betting) are unregulated.  Both parties agreed on the need to help consumers understand the associated risks.
• Consumer Credit Act 1974 reform: Concerns were raised about inconsistent regulatory protection for SMEs depending on their structure and loan size. HM Treasury plans to consult on reforms soon.
• Investment consultants: Whilst a good investment consultants' work is helpful in supporting the government's agenda (e.g. pensions reform), it often falls outside regulation. A government response to a consultation under the Pensions Investment Review is expected soon, with further engagement planned.
• Appointed Representatives: Oversight quality by some principal firms is poor. The FCA supports potential legislative changes, and the EST emphasised balancing consumer protection with proportional regulation.

To read the HM Treasury's policy paper, please click here. 

FCA publishes speech on its enforcement priorities

On 16 April 2025, the FCA published a speech by Therese Chambers, joint executive director of enforcement and market oversight, on the FCA's enforcement priorities. In the speech it was confirmed that the regulator's enforcement action is about deterrence, and action to deter misconduct must be timely and visible.

The areas the FCA cares about most are:

• Keeping dirty money out of the financial ecosystem.
• Taking swift action where regulated firms are being used as vehicles for fraud.
• Keeping markets clean.
• Developing a safe crypto regime that protects consumers.

The FCA wants to make sure that regulation is appropriately risk-based, so that industry can calibrate its efforts effectively. It is also interested to understand how digital ID could support enhanced verification methods. In the meantime, it will continue to spend considerable resource and effort in policing this area. The FCA also confirmed that combatting fraud and market integrity are major priorities.

To read the speech, please click here.

With thanks to this week's contributors: Nitin Mathias, Haiying Li, Rebekah Bayliss, Damien O'Malley, Faheem Pervez, Joe Towse, Shauna Giddens.