Money Covered: The Week That Was – 26 June 2026

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

The first of Season 5 of our podcast, Money Covered – The Month That Was, was released this week. David Allinson and Mel Redding discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

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

Headline development

Financial planning firm partially successful in judicial review against FOS decision

In R (Wills & Trust Independent Financial Planning Ltd) v Financial Ombudsman Service Ltd [2026] EWHC 1566 (Admin), the claimant, Wills & Trust Independent Financial Planning Ltd (W&T), was partially successful in challenging a decision by the Financial Ombudsman Service (FOS) against them.

In the judicial review proceedings, W&T challenged FOS' decision on 5 grounds.  The first four grounds were dismissed, but W&T were successful on the fifth ground, which concerned calculation of redress. In the underlying complaint, the complainants initially invested funds in 2018 based on information provided by W&T which FOS found was misleading.  The complainants eventually transferred their investment elsewhere in 2023. 

FOS ordered compensation to be calculated with reference to losses as at the date of the decision (i.e. well after the 2023 transfer).  W&T argued that this was irrational, as it made them responsible for the investment performance after 2023, which they had no control over and was entirely unrelated to any wrongdoings found by FOS.  The court agreed that FOS' method was logically flawed and W&T were successful with regards to that part of their judicial review.  The court found that the complainant would be adequately compensated by reference to their losses up to the date of the 2023 transfer, with benchmark returns or compensatory interest applied thereafter.

The judgment also contained interesting commentary from the court concerning FOS' ability to examine wrongdoings which fell outside of the complainant's complaint but which FOS happen to identify, noting that FOS were not permitted to do this.

FCA regulated entities

FCA consultation seeks consistent standards across the SIPP market

The FCA has launched a SIPP market consultation (CP26/20) to increase consistency of standards while maintaining SIPP flexibility and broad investment choice. 

Although most providers “are already doing the right thing”, the FCA cites historic examples of poor due diligence, weak record keeping and gaps in protecting client money and assets. Proposals include clearer, market wide due diligence standards and stronger requirements for the handling of pension scheme money and assets, intended to reduce consumer harm where firms fail or wind down. 

The FCA links the reforms to Consumer Duty by clarifying “what good practice looks like”, and frames them as part of its wider modernisation of pensions and long-term savings (noting higher average SIPP pot sizes). 

The consultation periods starts on 22 June and closes on 24 August 2026.

See the article in full here and the FCA press release here.

FCA relaxes motor finance redress scheme obligations for now

On 24 June, the FCA updated its guidance for firms on motor finance complaints, confirming it is temporarily taking a pragmatic approach to certain obligations under the motor finance compensation scheme while legal challenges proceed in the Upper Tribunal.

The FCA is discussing with the Tribunal and challengers whether some elements of the scheme can be suspended. In the meantime, the FCA will not currently (i) require firms to communicate with customers or make payments in line with the scheme timetable, or (ii) enforce compliance with the monthly reporting requirement.

The FCA will keep this under review as the Tribunal timetable becomes clearer and will engage with lenders and consumer groups on whether further consumer communications or information about preparations/contingency planning is appropriate. Despite the relaxation, firms should continue work that can be done now and would be needed in all circumstances.

FCA sets out findings on insurers' financial crime controls

The FCA has published the findings of a multi-firm review into financial crime systems and controls across a selection of large retail, wholesale and life insurance firms.

The FCA found that firms’ financial crime systems and controls were mostly effective in design, but identified areas where improvements are needed.

In particular, the FCA highlighted the need for firms to ensure that:

• financial crime risk assessments are supported by clear evidence and tailored to specific business units;
• policies and procedures are not limited to broad group-level frameworks, but are applied properly at business unit and jurisdictional level;
• monitoring and testing arrangements are structured, risk-based and clearly documented;
• roles and responsibilities are clearly allocated, including through appropriate RACI-style governance arrangements where useful; and
• outsourced financial crime activities are subject to proportionate, risk-based oversight.

The review also identified areas for improvement in client due diligence arrangements, AML transaction monitoring, obligations mapping and the documentation of firms’ rationale for reduced or alternative financial crime controls.

The FCA found that life insurance firms generally had stronger controls than retail and wholesale firms. Retail firms showed strengths in sanctions, fraud risk management and anti-bribery and corruption controls, but had weaker risk assessment and client due diligence controls. Wholesale firms were assessed as moderate overall; fraud management was generally weaker, and transaction monitoring was not consistently embedded across those firms.

The FCA expects firms to consider the findings, assess how they apply to their own businesses and make any necessary improvements. It has also said it will continue to monitor how firms meet their requirements to prevent and detect financial crime.

To read more, please click here.

Treasury confirms anti-circumvention rules for ISA reforms

The Treasury has confirmed anti-circumvention rules associated with planned cash ISA reforms, following a recent announcement.

The key updates proposed are:

1. A 22% flat-rate charge on certain ISA cash interest (from 06/04/2027)
2. “Cash-like” portfolios to be treated as cash
3. Transfer bans from non-cash ISAs into cash ISAs (from next year) and restrictions on Cash ISAs to Stocks and Shares ISAs
4. The annual limit for cash ISAs will be reduced to £12,000

The rules will only apply to under 65-year-olds and will be subject to a short technical consultation ahead of the final legislation being set out in the Autumn Parliament term.

It is the Government's objective to discourage people from sticking with cash in favour of long-term investing; however, the risk is that people are even more cautious about investing and therefore may choose not to.  One to look out for in relation to wealth managers/financial advisers as those not on top of the developments could see complaints around the charge in particular.

To read more, please click here.

Auditors

FRC revise UK auditing standards

The Financial Reporting Council (FRC) has revised three UK auditing standards to make auditors' reports shorter, clearer and more decision-useful for investors, alongside new guidance clarifying auditor responsibilities under the revised UK Corporate Governance Code.

The FRC has updated ISA (UK) 700, ISA (UK) 701 and ISA (UK) 720 following a public consultation with broad support across the audit, investment and governance sectors.

The revisions include the removal of unnecessary reporting requirements, placing a greater focus on information investors find most useful and aligning UK standards more closely with international equivalents. The changes also reflect the Government's wider agenda on regulatory reform and economic growth by removing unnecessary burdens on businesses and strengthening the quality of information available to investors.

For companies that follow the UK Corporate Governance Code, auditors will be required to describe how the company’s controls affected the audit and, where very serious control deficiencies are identified, to communicate them in the auditor’s report.

The changes will take effect from 15 December 2026.

To read more, please click here.

With thanks to this week's contributors: James Parsons, Heather Buttifant, Brendan Marrinan, Ben Simmonds, Alison Thomas and Kerone Thomas

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.