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The FCA has published the long-awaited findings from its review of financial advisers’ ongoing services. While most ongoing suitability reviews were delivered as promised, the regulator signalled concerns with reviews which were not attempted and where clients failed to engage with the review process. The FCA has asked advice businesses to review its findings and take any necessary remedial action, including paying redress to impacted clients.
With the regulator due to check up on firms later this year, it’s important you review your approach to ongoing service delivery and can demonstrate that you’ve acted where needed.
Why ongoing services are a key FCA priority
Financial advisers provide ongoing services to more than four million clients, with ongoing adviser charges making up more than 80% of advice firm revenue. The FCA has made ongoing services a key priority and is using its work on this area as a litmus test for whether firms have embedded the Consumer Duty.
Key findings from the FCA’s review
The FCA review assessed whether 22 of the largest firms had delivered ongoing suitability reviews to clients during the previous seven years. It found:
- suitability reviews were delivered in 83% of cases
- clients either declined or did not respond to the firm’s offer of a review in 15% of cases
- firms reported they had made no effort to deliver the suitability review to clients in 2% of cases.
The regulator also signposted a number of poor practices in key aspects of ongoing service delivery:
| Focus area | FCA concerns |
| Poor client disclosure | Firms were not providing clients with the information they needed to understand and engage with the ongoing service proposition. |
| Weaknesses in policies, procedures, and controls | Firms had ineffective processes, controls, and monitoring arrangements – risking services not being delivered in line with contractual and regulatory obligations. |
| Insufficient management information and oversight arrangements | Firms did not have the management information required to allow senior management to oversee the delivery of ongoing services and the quality of outcomes for clients. |
| Inadequate record keeping | Firms didn’t have the records needed to demonstrate that services had been scheduled, carried out, and delivered in line with their contractual and regulatory obligations. |
Action being taken by the FCA
While the vast majority of ongoing suitability reviews were delivered, the FCA’s review found that roughly one in six clients didn’t receive their reviews. This exposes firms to potential liabilities from failing to meet the contractual obligations and regulatory requirements within their ongoing services.
In response, the FCA has asked all firms to review whether they have delivered against the regulatory and contractual obligations for their ongoing services. Where this isn’t the case, firms are expected to take proactive steps to assess and remedy the situation, including paying redress where appropriate, with the FCA indicating that these proactive reviews should look back to 2018.
Separately, the FCA has committed to reviewing the rules around ongoing services later in 2025 to ensure they remain up to date and relevant to the sector. This could lead to greater clarity on regulatory expectations and amendments to the existing rules inhibiting positive market developments. For example, introducing greater flexibility on the timing of ongoing suitability reviews.
What you need to do next
Given the risk of potential liabilities from ongoing services and the FCA’s commitment to ongoing supervision on this topic, it’s important to revisit key aspects of your approach and act where needed. We believe there are three key areas to consider.
Review your historic approach to ongoing service delivery
You should assess whether you delivered against your ongoing service commitments, with the FCA indicating this review should look back to 2018. Your assessment should focus on whether ongoing suitability reviews were offered, took place, and the outcomes documented.
If your ongoing services include a wider variety of service features (in addition to a periodic review of suitability) it’ll also be important to assess whether they were delivered, as this evidence is likely to help inform the nature and extent of any remediation needed.
You should make sure you record the action you’ve taken and ensure it’s subject to appropriate oversight, as the regulator has committed to further monitoring work later in 2025 to assess this.
Establish whether any remediation is due
The reasons for service non-delivery, and any actions taken in response, will be key to determining whether and what remedial action is needed.
Where no attempts were made to initiate or deliver ongoing suitability reviews, the FCA has said that it expects redress to be due. But where reasonable steps were taken to engage with clients to carry out reviews, redress is less likely. This will depend upon the quality of the communications sent to clients, the action taken in the absence of clients participating in the review process, and the pattern of service delivery.
If you identify clients that failed to engage with the review process persistently (such as over multiple, consecutive years), you’ll need to consider whether the service should have been stopped and if redress is due.
If redress is required, it’s important to make sure there is a robust methodology in place to calculate it – otherwise there’s a risk that clients might complain and go to FOS. Your redress methodology should include whether to offer a full or partial refund of fees (dependent upon which service components were or weren’t delivered) and whether redress is due for any losses from the failure to deliver the suitability review.
Review your approach to future ongoing service delivery
You’ll also need to review your policies, procedures, and controls for how ongoing services are delivered, including ensuring your approach meets the higher standards required by the Consumer Duty.
As part of this, you should assess whether:
- Services are appropriate for client circumstances: There should be a clear target market for each ongoing service, and consideration of any clients for whom the service may not be appropriate. This might include clients who are unwilling to participate in the ongoing review process. The detailed content of each service should also be tailored to the needs and objectives of the client segments you serve – so in the ‘goldilocks zone’ of not too little, not too much.
- Services provide fair value: There should be a strong link between the benefits clients receive from your ongoing services and the price they pay, and this needs to hold true for all the client segment you serve. The structure of your fee model and refund policy are key to this.
- Services are communicated clearly: The content of your service, frequency of service delivery, associated charges, and ability to cancel should be disclosed clearly to clients in language they understand.
- Contractual and regulatory obligations are met: There should be processes in place to ensure service features are scheduled and delivered, and that any advice given meets relevant regulatory requirements. Robust record-keeping and monitoring are also needed.
- Appropriate action is taken where services are not delivered: There should be clear policies, processes, and controls to manage the risks of poor client outcomes where services are not delivered as promised. This should include the approaches to communicating with clients, rescheduling review meetings, assessing suitability, remediation and refunds, and moving clients to alternative services, where necessary.
How can Bovill Newgate help improve your ongoing services framework?
Our team of experts can help you assess all aspects of your ongoing service proposition. We offer a range of services focused on assessing whether ongoing services are designed and delivered in line with regulatory and contractual obligations.
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