This month, the FCA reminded us – again, that proving compliance isn’t enough. It’s not about showing you followed a process; it’s about showing the process worked.

From pension lump sum cancellations to behavioural decision making in investment advice, the regulator’s latest activity is pointing to one clear direction: firms must be able to evidence good outcomes, not just intend them.

In this edition, I’ve summarised the key regulatory movements and what they mean for firms building advice that’s both compliant and defensible.

 

1. Pension Lump Sums: Clarity Over Convenience

The FCA’s latest statement on tax-free pension lump sums underlines how clarity and timing of communication remain under scrutiny.

Clients must be told, clearly and early, about their cancellation rights when accessing tax-free pension cash. This might sound procedural, but it cuts to the core of Consumer Duty – ensuring clients can make informed decisions, not just sign compliant paperwork.

If your firm uses templated pension communications or scripted processes, it’s worth reviewing:

• When and how cancellation rights are explained.
• Whether the language used matches the client’s understanding.
• How that understanding is evidenced in the file.

Because in 2025, intent isn’t enough – evidence is everything.

 

2. CP25/17: Behavioural Oversight Is the Next Frontier

The FCA’s Consultation Paper CP25/17 signals a growing focus on the behavioural side of consumer decision-making.

The consultation explores how firms present information, the sequencing of options, and the role of framing in client understanding. It’s another sign that “clear, fair, and not misleading” is evolving into “clear, understood, and evidenced.”

This shift has practical implications:

• Advice documentation should show how recommendations were presented and interpreted – not just the technical justification.
• Internal reviews need to track behavioural indicators such as overrides, deferrals, or drift from client objectives.
• Governance frameworks must demonstrate that behavioural risks are actively managed, not assumed away.

In other words, Consumer Duty has moved from paperwork to psychology.

 

3. The Bigger Picture: Governance and Accountability

According to Grant Thornton’s weekly regulatory insight, the FCA’s ongoing communications this quarter consistently tie back to governance evidence.

Boards are being encouraged, or required, to demonstrate how senior management systems (SYSC) translate into real-time oversight. Under SM&CR, defensible delegation depends on showing that advice risk is identified, monitored, and resolved – not just that a policy exists.

We’re seeing many firms move from static QA to what we call active assurance: live suitability scoring, override analysis, and version-controlled logic. It’s the difference between being compliant on paper and being confident under audit.

 

4. Suitability: Still the Linchpin

Every regulatory thread – Consumer Duty, PROD, SYSC, or COBS – eventually comes back to suitability. But suitability today is less about justification and more about defensibility.

As we explored in our recent Advice Integrity white paper, the question isn’t “Can you show why this advice was suitable?” It’s “Can you prove it was suitable the first time?”

That mindset shift requires:

• Structured, versioned advice logic.
• Measurable evidence of client understanding.
• Integrated adviser–consultant collaboration before QA even begins.

At We Complement, our Suitability Consultants are already embedding these frameworks – ensuring firms aren’t just compliant, but audit-ready by design.

 

5. Practical Takeaways for October

If you’re reviewing internal processes this month, here are three simple but high-impact checks:

1. Audit your pension communications. Are cancellation rights clear, accurate, and captured as evidence of understanding?
2. Test a recent advice file under Consumer Duty lens. Would a third party conclude the client’s decision-making was genuinely informed?
3. Review your management information (MI). Are you tracking behavioural indicators – such as override rates or objective drift – in a way that feeds back into governance learning?

These aren’t tick-box tasks; they’re the mechanics of modern integrity.

 

6. Why This Matters

The FCA’s narrative has become unmistakable: process without proof is no longer protection.

Good governance isn’t reactive; it’s built in. The firms that thrive under this evolving regime will be those that move from “checking” to “evidencing.”

As advisers, paraplanners, and suitability consultants, our collective role is to make that evidence feel natural – embedded, not bolted on.

That’s how trust is rebuilt. That’s how integrity becomes the norm.

 

If this resonates with what you’re seeing in your firm, we’d love to hear from you. No pitch – just people who get financial advice, trying to make sense of what the FCA really means by “good outcomes.”