The FCA's CP26/10 proposal scraps the blanket requirement for annual suitability reviews. On the surface, that is a lighter regime. Less prescriptive. More flexibility. Fewer mandatory client meetings.
Most firms have read it that way. Most firms are wrong.
CP26/10 doesn't let you off the hook. It puts you on a bigger one.
What the consultation actually swaps
The mandatory annual review goes away. What arrives in its place is a duty to evidence, for every client paying ongoing fees, that the fee is being earned. Every year. Per segment. Documented. Defensible.
The FCA is not reducing the compliance burden. It is reframing it. The old requirement was process-led: run the review, tick the box. The new requirement is outcome-led: prove the client is getting value for the money they are paying, and prove it every year.
Process is easier to run. Outcome is harder to evidence.
Why the hook is bigger, not smaller
Three things change under CP26/10 that make the compliance position harder, not easier, for a firm charging ongoing fees.
First, the firm has to decide, for each client segment, what review frequency is appropriate. That decision has to be defended with evidence. Annual review logic was defensible by default. Anything less than annual now needs justification per segment.
Second, the evidence bar rises. A file note that says "annual review conducted, no action required" does not demonstrate ongoing value. Under the new regime, firms need to show what was checked, what was discussed, what changed, and what was done. Every year. Per client.
Third, ongoing fees become structurally tied to ongoing evidence. If you cannot document the value a client is receiving, you cannot defend the fee. The fee comes back. The client walks. Either way, the revenue goes.
The long-tail problem just got commercial
A typical advice firm has a tail of ongoing-fee clients whose annual revenue does not cover the cost of adviser time required to review them. Under the old regime, those firms ran the reviews anyway and absorbed the cost. Under CP26/10, the firm has three options.
Option one: keep reviewing at adviser cost and accept the margin hit. Commercially, this is the worst of the three. The numbers do not work.
Option two: stop charging ongoing fees on these clients. This protects compliance but surrenders the revenue. It also forces a conversation the firm does not want to have.
Option three: find a way to deliver the review and the evidence at a cost that matches the fee. That is the structural fix.
What this looks like in practice
We built the model inside a live IFA firm with 578 clients. Trained Relationship Managers conduct the review inside the firm's Intelliflo, under the firm's brand, using a structured template aligned to Consumer Duty. The output is a documented review with objectives, vulnerability assessment, escalation trigger, actions, and MI. The same evidence pack CP26/10 will require.
In the pilot, 90% of reviews needed no adviser involvement. The 10% that did generated revenue on escalation, enough to cover the review programme two and a half times over.
The adviser stays focused on the complex work. The long tail keeps getting serviced. The firm keeps the ongoing fee. The evidence is produced as a by-product of the review.
What firms should do this week
Pull your client list. Segment by ongoing fee revenue. Take the bottom quartile. Work out what a Consumer Duty-grade annual review costs you in adviser time. Compare it to the ongoing fee.
If the review costs more than the fee covers, you have a CP26/10 problem. Not in 2027 when the policy lands. Now, because the fix takes longer than the consultation window.
The firms that start building a review infrastructure this quarter will transition cleanly. The firms that wait for final rules will face the same problem under compressed timelines.
How Pillar fits
Pillar runs structured, non-advice client reviews for IFA firms. Under the adviser's brand. Inside the adviser's Intelliflo. Per-review pricing. No setup fee. Every review generates the evidence pack CP26/10 will require.
If the CP26/10 numbers are keeping you up, we should talk.