The UK IFA compliance load in 2026 — what's actually changed

I first drafted a version of this piece when Consumer Duty was the only thing on the FCA's letterhead. Rewriting it for 2026 has been a strange exercise. The rules haven't simplified. They've layered. And the layering is what makes 2026 feel heavier on a small or mid-sized IFA firm than the first year of any single regime ever did.

Four pieces are now load-bearing. I'll take them in turn.

1. Consumer Duty year 2: from "we built it" to "show me the outcomes"

Year 1 of Consumer Duty was about implementation. Firms wrote target-market statements, ran a fair-value assessment, refreshed disclosures, mapped distribution chains, and assembled a first board-level annual report by the 31 July 2024 deadline. The FCA accepted that the first cycle would be uneven. It said so explicitly in the year-1 multi-firm reviews and again in the FG22/5updates.

Year 2 is different. The expectation for the cycle ending 31 July 2025 (the one your firm has just signed off) was outcomes evidence, not implementation evidence. The four-outcomes framework (products and services, price and value, consumer understanding, consumer support) had to be backed by data. Complaint cohorts. Lapse-and-surrender rates by client segment. Vulnerable-client adaptation rates. Suitability-report re-issue counts. Ongoing-service-review completion against schedule. The FCA's multi-firm review of board reportsin late 2024 was blunt about what "good" looks like, and where the early gaps were.

Three things have changed specifically in 2026:

• Vulnerable-client evidence.The regulator now expects firms to show what proportion of the client book has been assessed for vulnerability characteristics, what was found, and what adaptations followed. A number with no comparative cohort isn't sufficient any more.
• Fair-value across the distribution chain. IFAs using MPS, DFM, or platform-bundled propositions are expected to evidence a chain-wide assessment, not just the firm's own ongoing fee. The 2025 MPS multi-firm reviewmade the chain question explicit.
• Outcomes monitoring as a continuing obligation.Not a once-a-year exercise. Firms are expected to monitor outcomes on a continuing basis and to act on what the monitoring shows. The board report becomes a synthesis of an ongoing rhythm, not an annual data-pull.

If your firm's year-2 report read like a year-1 report with refreshed dates, the supervision team will notice. I know of several firms that have already had follow-up Section 165 information requests on exactly that basis.

2. The Advice/Guidance Boundary Review, and Targeted Support live from 6 April 2026

The Advice/Guidance Boundary Review (AGBR) was launched in late 2023 as DP23/5, a joint FCA and HM Treasury initiative. The premise was simple. The regulated-advice perimeter sits too far from where consumers actually want help, and most people muddle through retirement with no formal advice and no useful guidance either. Three proposals were on the table: clarifying the existing boundary, simplifying the advice rules, and creating a new "Targeted Support" regime.

Targeted Support went live on 6 April 2026. It's now a regulated activity. A firm can deliver Targeted Support without performing full regulated advice (meaning without a personal recommendation tailored to the individual's specific circumstances). What it can do is identify a "consumer in a particular target group with a particular characteristic" and offer a "ready-made suggestion" that is reasonable for that group. The model is closer to "guidance with a steer" than to advice.

For most established IFA firms, Targeted Support isn't a direct day-job change. Your firm is still doing full regulated advice. But it matters indirectly, for three reasons:

• Platform and provider conduct has shifted.Your platform partners and product manufacturers can now offer Targeted Support to non-advised customers under their own permissions. That changes what self-directed clients see when they log in to a platform you've recommended. It also changes the nature of the conversation when a client comes back to you and says "my platform told me to..."
• Distribution-chain consequences.If a manufacturer is using Targeted Support to nudge end consumers into specific products, your firm's distribution-chain assessment under Consumer Duty needs to account for that.
• The market structure your firm sells into has changed.A consumer who would previously have walked into an IFA because they had no alternative now has a regulated middle option. The wedge that distinguishes proper advice from Targeted Support is the personalisation. And that personalisation has to be visible in what your firm produces.

The other half of AGBR (simplifying the existing advice rules) is moving through consultation. Which brings us to CP26/10.

3. CP26/10: simplifying the advice rules for mass-market investment

CP26/10was published earlier this year. Its premise is that the current advice rules treat a £15,000 ISA recommendation with the same procedural weight as a £1.5 million pension transfer, and that this procedural symmetry is part of why mass-market advice has become uneconomic to deliver.

The proposals are still in consultation as of May 2026, with responses due in summer. The headline elements:

• A simplified suitability standard for investments below a financial-threshold cap, where the client's circumstances are simple and the recommendation is constrained to a defined product menu.
• Reduced fact-find and disclosure requirements for that simplified pathway.
• Continued application of Consumer Duty across the simplified pathway. The rules get simpler. The outcomes obligation does not.

What does this mean for an IFA firm operating today? Nothing changes in May 2026. Your firm continues to deliver advice under the full rules. But if CP26/10 lands roughly as drafted, by the time the simplified rules go live (likely 2027), the firm has a strategic choice. Add a simplified-advice service tier for clients who currently fall below the firm's minimum. Or leave that market to the providers and TS-permitted firms. The choice has implications for client acquisition, fee structure, and the segmentation work your firm did under Consumer Duty year 1. Honestly, it's worth thinking about now, while it's still optional.

4. The supervision tone: what the FCA is actually doing

Enforcement headlines tell one story. Day-to-day supervision tells another, and the day-to-day is what most IFA firms experience.

Three observable shifts in 2025 and 2026.

The first is more Section 165 information requests and fewer formal investigations. The FCA is asking for data (outcomes-monitoring extracts, fair-value assessments, vulnerable-client cohort data) without opening a formal supervisory file. The threshold for an information request has effectively dropped. Firms that can produce the data in a usable format inside the requested window come out the other side with a clean record. Firms that can't, find themselves in a slower, harder conversation that's much more expensive to navigate.

The second is increased focus on firms with assets under £500 million. The FCA's 2025-26 business planmade this explicit. Smaller firms had historically been touched less often by supervision. That gap has now closed. The 41% increase in supervision touchpoints for sub-£500m AUM firms reported in late 2025 isn't just a number. It shows up in the diary as a Section 165 letter your firm wouldn't have received three years ago.

The third is that the conduct rules are bedding in. SMCR has been live for IFAs since 2019. What's different in 2026 is the rate of certification breaches the FCA is actually pursuing. Fewer than the headlines suggest. More than zero. And concentrated in firms where the documentation between a conduct concern and the certification decision wasn't there.

What the load actually looks like inside a firm

The published cost figures vary wildly. Compliance consultants quote 28 to 35% of operational time. Trade-body surveys land lower. My own observation across the firms I've worked with is that the load is uneven. It bunches around the July board-report cycle, around supervisory information requests when they land, and around new-client and ongoing-review work where Consumer Duty has lengthened the documentation that a suitability report has to support.

The pieces that drive the load are recognisable across most firms:

• Outcomes-monitoring data extraction from CRM, platform, and back-office systems on a quarterly cadence.
• Fair-value assessment refresh. At least annually for the firm's own ongoing fee, more often where the chain has shifted (e.g. a platform pricing change or a new MPS provider).
• Vulnerable-client review as a continuing exercise, rather than a once-a-year tick.
• Suitability-report production heavier than pre-Consumer Duty, particularly the outcomes language and the link to the firm's target-market statement.
• Distribution-chain information-flow. Chasing manufacturers and platforms for the data your firm needs to discharge its own obligations.

None of these is new in 2026. What's new is the cumulative weight, and the fact that the FCA has now had two full year-end cycles to calibrate what good looks like.

What a well-prepared firm does this year

Look, no firm I work with has all of this fully nailed. But the firms that come through 2026 well tend to do the same five things between now and the next board-report cycle:

• Run a year-2 lessons-learned exercise on your own board report.Where was the data thin? Which outcomes were hard to evidence? What would have to change in the firm's systems for the year-3 cycle to be easier? Do this before October, while year 2 is fresh.
• Audit your distribution-chain documentation.Pull every manufacturer's most recent target-market statement and fair-value summary. Where you can't find one, write to the manufacturer and ask for it. Keep the request log. It's the firm's evidence that it has been doing its bit.
• Decide your Targeted Support posture.Are your platform partners offering it? What are they offering, and to which client segments? Where does that overlap with your service tiers? You don't have to act on the answer yet. You do need to have asked the question.
• Respond to CP26/10.Trade-body responses get noticed. Firm-level responses, particularly from firms with clear segmentation work, get noticed more. Your input on the simplified-advice cap and product menu has a non-trivial chance of being read.
• Run a Section-165-readiness drill.Pick a hypothetical information request ("produce your most recent vulnerable-client cohort data and the actions taken in response") and time how long it takes the firm to assemble it. If the answer is longer than a working week, the firm has a systems problem, not a compliance problem.

Where Wealth Analytica fits

The technology piece isn't the regulatory piece. Compliance is a judgement-and-discipline exercise that your firm runs against the rules and the supervision tone. But the systems that produce the evidence (the outcomes-monitoring extracts, the fair-value worksheets, the vulnerable-client cohort data, the audit trail) are the bottleneck in most firms we talk to. Wealth Analytica's practice-management moduleconsolidates the data sources, automates the recurring extracts, and reduces the Section-165-readiness drill from a project to a query.

The compliance load isn't going to lighten. The way your firm carries it can.