2030 vision – what the FCA’s 5-year plan means for firms

In March 2025, the Financial Conduct Authority (FCA) launched a bold new strategy aimed at modernising how financial services are regulated in the UK over the next five years. The changes are designed to strike a better balance between protecting consumers, at the same time as helping the financial industry grow and innovate. Two months on since the plans were revealed, we consider what the impact might be for regulated firms, as well as looking at some changes that have already taken place.

What are the changes?

The FCA announced five main priorities which are, to:

1. Become a smarter regulator – to move away from complicated rulebooks and towards a more flexible, outcome-focused style of regulation
2. Support growth – to make the UK a more attractive place to do financial business by cutting unnecessary ‘red tape’ and encouraging new ideas, technology and investments
3. Help consumers navigate financial products – providing clearer, more helpful information and ensuring greater consumers have greater confidence
4. Fight financial crime – using tools, including AI, the regulator will work more effectively to stop scams, money laundering and fraud

What will the impact be?

For FCA regulated firms, the changes mean both opportunity and responsibility. Whilst the rules may be simpler, firms will be expected to prove that they are delivering good outcomes. They will also have to be more transparent and accountable in areas such as customer service, pricing and fairness. The expectations arising from the Consumer Duty will also remain front and centre – firms will need to ensure they are acting in customers’ best interests, including ensuring products are fair, clearly explained and serve a real purpose.

A big push is also expected on the use of technology, where appropriate, and firms will need to be seen to be embracing new resources. The FCA is keen to use data smartly and securely.

Current developments

Whilst it has only been two months since the 5-year plan was revealed, there have already been a large amount of changes announced by the FCA, which we discuss below.

• Guides will be produced to assist firms navigate the Consumer Duty (almost two years after it was first implemented). It is clear the FCA is keen to help firms make positive changes and comply . The announcement of the guides follows feedback from smaller firms that they were struggling to get to grips with the changes
• All ‘Dear-CEO’ and portfolio letters will be reviewed, with most of them being withdrawn on the basis they are no longer fit for purpose
• Appointed Representatives (ARs) will share the responsibility of complying with duties – with the idea being a partnership between an AR and principal firm where there is open communication, will see outcomes improve
• A reminder to mortgage advisers that they must scrutinise the needs of the customer, rather than recommending a product simply because they qualify
• The potential simplification of mortgage rules, which would streamline the advice process in an effort to support sustainable home ownership
• An overhaul of the complaints reporting process for firms, making it less onerous and more straightforward to report complaints to the regulator
• A review into Pure Protection Plans – to ensure such plans are fair, transparent and provide genuine value to consumers
• Plans to simplify insurance rules. The changes will remove duplicated or unnecessary rues from its handbook, in turn making the insurance market more agile and competitive, whilst still protecting customers.

Comment

We are starting to see the reshaping of the UK’s financial regulatory landscape, arguably to a greater extent than any changes in recent years. The FCA is promoting innovation, whilst continuing to enhance consumer protection and strengthen the fight against financial crime and the large amount of changes detailed above show the regulator is keen to exact real change. Whether this will mean an increase in claims against FCA regulated entities remains to be seen, but what is clear, is that the FCA will be expecting more from firms and are unlikely to look favourably upon any problems that arise.