Money Covered: The Week That Was – 3 October 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

RPC publishes latest FOS complaints newsletter

Our latest FOS complaints newsletter has recently been published.  The newsletter is prepared quarterly and analyses data released by FOS to identify trends and spot emerging issues.  

To read the newsletter, click here.

Auditors

FRC issues 4 new consultations

The FRC has released 4 new consultations this week, covering enforcement tools, auditing standards related to fraud and going concerns, auditor reporting standards and a proposal not to make any changes to the current FRS 101 Reduced Disclosure Framework. We explain more on each below

Audit enforcement tools 

The FRC proposes adding three new ways to address breaches of auditing and ethical standards to the two methods which already exist.

The first proposal is public constructive engagement, which will allow the FRC to publish the details and outcomes of how a company will address auditing breaches. The hope is that the availability of information will both educate other audit firms and deter future breaches. 

The second proposal introduces an accelerated procedure for resolution where a company has made a clear admission of failings. 

Thirdly, the FRC is seeking to implement an early admission process that will allow companies to conduct their own review under FRC oversight. 

Richard Moriarty, the FRC's Chief Executive, stated that these additional measures will enable the FRC to 'take more proportionate and timely action while maintaining [its] ability to conduct thorough investigations where needed.'

To read more about the consultation, including links to a webinar on the topic, click here. 

Auditing standards

The FRC is also consulting on ISA (UK) 240 and 570, which deal with auditors' responsibilities regarding fraud in financial statements and evaluating going concerns.  The proposed changes would bring the standards in line with standards issued by the International Audit and Assurance Standards Board (IAASB).

To read more about this consultation, click here.

Auditor reporting standards

A further consultation has been launched on the following auditor reporting standards:

• ISA (UK) 700 – Forming and opinion and reporting on Financial Statements
• ISA (UK) 701 – Communicating Key Audit Matters in the Independent Auditor’s report
• ISA (UK) 720 – The Auditor's Responsibilities Relating to Other Information

Proposed changes are aimed at simplifying report, reducing boilerplate language and providing more relevant information for investors.  As with the audit standard proposals above, these are intended to bring the standards in line with the IAASB standards.

To read more about this consultation, click here.

FRS 101 Reduced Disclosure Framework

Finally, as part of an annual review, the FRC has proposed no changes to the FRS 101 Reduced Disclosure Framework.  The FRC carries out an annual review to ensure that the FRS 101 Reduced Disclosure Framework is in line with IAASB standards, and this year, it found that no changes were required to meet those standards.

To read more about this consultation, click here.

FRC Finds Multiple Financial Reporting Failings in Review 

The Financial Reporting Council (FRC)'s Annual Review of Corporate Reporting revealed certain reporting issues that were prevalent across the market, though the FRC states that overall, the quality of reporting is stable as compared to last year.  

The top three issues identified were impairment, cash-flow statements and the reporting of financial instruments. 

Impairment refers to a permanent fall in the value of an asset. Should this happen the depreciation of the asset must be recorded down on the balance sheet. 

Reports from 10% of reviewed companies failed to demonstrate the requisite clarity. The FRC has highlighted that 'clearer [and] more comprehensive impairment disclosures or better connectivity between disclosures and other areas of the balance sheet' would have prevented the reporting issue. 

Furthermore, the reporting of financial instruments was a particularly serious issue requiring the restatement of three company's financial reports. 

The FRC warned companies that combining dissimilar items into a single amount is inappropriate as it can mask the risks to assets and/or liabilities. 

Overall, the FRC noted that there is a significant quality gap in reporting between FTSE 350 companies and smaller companies and confirmed that it is undertaking a thematic review of reporting standards for smaller companies to address this.

To read more, please click here.

Insolvency practitioners

Updated Insolvency Code of Ethics now in effect

A new version of the Insolvency Code of Ethics came into force on 1 October 2025, bringing in updates to standards around professional behaviour, ethical mindset, and responsible use of technology.

The update, approved by the Joint Insolvency Committee and published by ICAEW for its members in England, reflects changes to the international IESBA Code and sets out clearer expectations for insolvency practitioners (IPs) – not just in formal appointments but across all areas of professional conduct.

Key changes include:

• A stronger focus on acting in the public interest and maintaining integrity under pressure.
• A requirement to apply an inquiring mind when interpreting and applying the Code.
• Clearer expectations around online behaviour, particularly where professional identity is visible (i.e. LinkedIn).
• An explicit stance that bullying, harassment, victimisation, and unfair discrimination are unacceptable and risk bringing discredit to the profession.
• New guidance on the use of technology, including responsible use of AI, maintaining data confidentiality, and assessing whether digital tools are suitable for professional decision-making.

There remains an overarching requirement for IPs to avoid any conduct – whether in a professional or personal capacity – that could damage public trust in the profession. The Code reinforces the principle that behaviour outside of formal appointments can still have professional consequences.

References to the Republic of Ireland have been removed as none of the issuing bodies now operate as regulators of insolvency work in that jurisdiction.

To read more, please click here.

Tax practitioners

HMRC Restarts Direct Recovery of Debts 

HMRC has confirmed the restart of direct recovery of debts (DRD) powers as an option to reduce tax debt. 

Under DRD, a bank or building society can be required to pay sums directly from an individual's account or cash ISA to HMRC where an individual has a minimum tax debt of £1,000. Individuals have thirty days from the start of the recovery process to lodge an objection and potentially appeal against the decision to a county court. 

HMRC has implemented certain safeguards to ensure that these powers are used appropriately. Firstly, DRD powers will only be applied where an individual has established tax debts, has passed the deadline for appeals and has repeatedly ignored HMRC. Secondly, affected individuals are guaranteed a face-to-face meeting with HMRC to discuss alternative proportionate solutions and are assessed for vulnerability prior to DRD recovery. 

To read more, please click here.  

ICAEW announces revised version of Professional Conduct in Relation to Taxation (PCRT)

The ICAEW have published an updated version of the PCRT which is to become effective from 1 January 2026. 

The PCRT has been updated to ensure that it is compliant with current international standards. This follows from the International Ethics Standards Board for Accountants (IESBA) publishing an updated code in relation to tax planning. The ICAEW, as part of their membership rules, must adopt IESBA codes. 

The new PCRT provides sharper guidance on what constitutes responsible tax guidance to ensure transparency with consumers. Key changes include: 

• Members being transparent with consumers regarding their relationship with a third-party provider of tax planning services.
• Members informing consumers that PCRT applies where a member is providing a second opinion on tax planning arrangements
• Members setting out actions they must take where there is disagreement with a consumer as to whether proposed tax planning is credible.  

It is important that all ICAEW members consider the revised PCRT and ensure they understand their obligations to avoid disciplinary action. 

To read the updated PCRT, click here.

Regulatory developments for accountants

Revised Actuaries' Code and Guidance now in effect 

The Institute and Faculty of Actuaries (IFoA) released an updated version of the Actuaries' Code (the Code) to reflect the growing emphasis on diversity, equity and inclusion considerations. 

The Code has six core principles: integrity, competence and care, impartiality, compliance, speaking up, and communication. These principles aim to clarify the existing requirements that IfoA members need to adhere to and highlight the mandatory nature of speaking up against unfair exclusion and/or treatment of others. 

The hope is that the revised Code will be able to balance the inclusion and protection of all its members, while respecting the full range of member perspectives on diversity, equity and inclusion. 

The revised Code is support by the non-mandatory guidance and the IfoA has advised its members to familiarise themselves with the guidance to better understand their obligations under the revised Code. 

To read more, please click here. 

IFAs and wealth managers

FSCS confirms claims against collapsed firm who took over £1m in loans from clients are valid

Trust Financial Planning, an IFA firm, collapsed in August this year after the FCA found that its plan to repay over £1m in loans it took from clients were not credible.  The FSCS has confirmed this week that, following investigation, it considers there are likely to be valid claims against the firm, though it has stressed that it cannot guarantee whether it will be able to pay compensation for any claims at this stage.  

The FSCS explained that valid claims are most likely to be related to the sale of £840,000 of preference shares to clients of the firm and confirmed that clients are now able to make claims for to the FSCS.  The remainder of the £1m in loans is composed of direct loans to the firm's director, Dan Brittenden, and other client loans to the firm.

To read more, click here.

Pensions

Society of Pension Professionals (SPP) warn pension professionals regarding proposed tax rules

The SPP has warned members that they could get swept up under HMRC's new proposed tax advisor rules following the proposed drafting of the Finance Bill.

The proposed legislation provides that any person aiding with documents "likely to be relied upon by HMRC" may need to follow HMRC tax rules. The concern is that those who do not provide tax advice, but undertake pension administration tasks, could become regulated by default as they would fall within the scope of the legislation. This means that advisors and firms who are not tax advisors may need to register with HMRC, meet their minimum requirements and regulatory obligations.

In light of the risk, the SPP has called for an explicit exemption for pension scheme administration and asked for clarification of the definition of a tax advisor.

The SPP has warned that the current proposals could have a significant impact on pension professionals throughout the country who may now have to register with HMRC and comply with their rules and regulations.

To read more, click here.

Regulatory developments for FCA regulated entities 

FCA Stopped Firms Charging Ongoing Advice Fees to Dead Clients

Lucy Castledine, the Consumer Investment Director at the Financial Conduct Authority (FCA), revealed that the FCA had stopped firms from charging ongoing advice fees to deceased customers while their estates were being administered.

The revelation was made to highlight the FCA's ongoing focus on the suitability of ongoing fees following the introduction of the Consumer Duty and highlights the FCA's ongoing focus on ensuring fees are not charged unless advice is actually provided.

Advisory firms should note that continuing to charge advice fees after a client dies or becomes incapacitated can increase their risk of liability for mismanagement of their former client's estate, and lead to financial consequences.

To read more, please click here.

Aegon Cautions FCA over targeted support rollout timing

Aegon has warned that the FCA's proposal to require firms to highlight “targeted support” to consumers from March 2026 could cause confusion if the regime isn’t fully established by then.

The FCA’s proposed changes would allow banks, advisers, and other financial firms to direct groups of customers to tailored support without offering regulated advice. Updates to the regulator’s handbook were also put forward to support the shift.

Steven Cameron, pensions director at Aegon, said the plan is premature. He noted that while raising awareness of available support is sensible, introducing signposting before firms are ready could lead to misunderstanding and frustration.

Aegon believes that initially only a small number of firms will offer targeted support in limited cases, with broader adoption expected over time. Requiring signposting before this happens could mislead consumers, especially if their provider isn’t yet offering the support.

The company also raised concerns about including signposts in documents like annual pension statements, suggesting it could create unrealistic expectations for customers unable to access support elsewhere.

The FCA is accepting feedback on the proposals until 17 October, with final rules expected in December. You can read more about this in the next article. The regime is due to begin in early 2026.

To read more, click here.

FCA propose handbook amendments

The Financial Conduct Authority (FCA) have published consultation paper CP25/26. CP25/26 is a follows on from consultation paper CP25/17 which provided suggested amendments to the rules in the Handbook for targeted support in the pensions and retail sector.

The purpose of CP25/26 is to consult on the various amendments to the rules in the Handbook to "ensure that our proposals work with existing requirements".

The FCA's proposals are summarised below

1. Ensure targeted support for pension and retail consumers co-exist with the existing rules and regulations.
2. Refinement of the rules in relation to commission and fees firms charge.

The consultation is open until 17 October 2025.

To read the consultation and respond, click here.

Emerging risks

Solicitor Fined £17,000 for failings in Off-Plan Property Investment Schemes

A solicitor has been fined over £17,000 by the Solicitors Regulation Authority (SRA) for failings linked to off-plan property investment schemes in a case that raises wider concerns about how solicitors engage with high-risk property arrangements, including those that may resemble Unregulated Collective Investment Schemes (UCIS).

Ming Fai Tam (also known as Matthew Tam) admitted to failing to adequately advise clients on the risks associated with buying properties that were still in development. The SRA found that Tam also failed to supervise a part-time consultant who was allowed to advise clients on these investments without the necessary training or oversight.

The SRA said clients had lost money in schemes where investor funds were used to finance developments that were either significantly delayed, never completed, or failed to deliver the promised returns. Tam was fined £17,083 and agreed to pay £1,350 in costs as part of a regulatory settlement.

The case forms part of a broader set of concerns about how legal professionals may be used to give credibility to investment-style property schemes, some of which involve fractional ownership, pooled investor funds or special purpose vehicles – all features that may carry UCIS-like risks, even if the schemes are not formally recognised as such.

Tam had operated under Batchford Solicitors, which closed in 2018, and later under MFT Solicitors, which ceased trading in 2021. According to the SRA, his involvement in the schemes included property transactions across 10 developments involving 312 properties between 2017 and 2020.

The matter also led to a High Court claim being filed in September 2024 by five Hong Kong-based investors, alleging that Tam and others – including UK-based developer Iqbal Bhatti and legal consultant Khalil Hosenbux – failed to warn investors about the risks. The claim describes the scheme as a fraudulent investment operation, involving the misuse of client funds.

The SRA said investors had paid legal fees of around £1,300 per property, and deposits ranging from 30% to 100% of the purchase price. In many cases, developments were never completed or failed to produce the anticipated rental or capital returns.

Tam was also criticised for failing to explain to clients that some of the structures used carried risks not typical of standard conveyancing. The watchdog found similar failings across a broader sample of client files involving other developments.

This case reinforces the SRA’s long-standing warning to solicitors about involvement in property schemes that blur the line between regulated conveyancing and investment promotion, particularly where solicitor services may be used to give false reassurance to retail investors. Firms are expected to conduct due diligence, identify when a scheme might carry UCIS-like risks, and avoid involvement unless the regulatory framework is fully understood and appropriate safeguards are in place.

To read more, please click here.