Prime Highlights:
- The FCA is making investing easier and more engaging by simplifying information for consumers.
- New rules clearly separate retail and professional investors, giving firms more flexibility to work with experienced and wealthy clients.
Key Facts:
- Complicated templates for investment disclosures will be replaced with clearer, easier-to-understand information.
- The threshold for professional investors remains high, but firms can now assess and work with experienced clients more efficiently.
Background:
The Financial Conduct Authority (FCA) has announced a suite of measures aimed at empowering retail investors, enhancing wholesale markets, and reinforcing the UK’s position as a world-leading financial centre.
The regulator said the proposals aim to make investing easier, simplify disclosures for consumers, and help firms engage retail investors more effectively. The FCA will stop using complicated forms and let firms share information that is easy to understand.
The changes also make it clear who is a retail investor and who is a professional investor. While the rules for becoming a professional investor remain strict, firms will have more flexibility when working with experienced, wealthy clients. This change is expected to streamline procedures and allow businesses to operate confidently outside retail regulations.
Simon Walls, FCA executive director of markets, said the reforms “support investment risk culture across the spectrum, ensuring firms can provide retail customers with material that informs and engages them while defining professional markets through informed consent and proportionate regulation.”
Industry leaders have welcomed the move. Barry Cook, interim proposition director at Quilter, described the changes as a “policy blitz” that will improve the UK’s investment culture. He highlighted that simplifying jargon-heavy documents and allowing clearer product summaries could improve consumer understanding and reward firms that focus on transparency.
Cook also noted the significance of distinguishing between retail and professional clients, particularly as access to private markets expands. “Updating investor definitions and creating more bespoke regulations will help people take positive action in their investment journey,” he said, emphasizing that encouraging more informed risk-taking could support wealth creation.
The FCA is now seeking feedback from firms and consumers to ensure the proposed measures meet the needs of the evolving investment landscape, supporting confident, long-term investment decisions.