On 16 October 2026, the Financial Conduct Authority (FCA) published a feedback statement on expanding consumer access to investments (FS26/3).
Background
The FCA sets out that FS26/3 summarises the responses it received to its Discussion Paper (DP25/3) published in December 2025 and how and when it plans to act on that feedback.
Summary
The FCA sets out in FS26/3 its response to the feedback received in relation to DP25/3 and proposed next steps in relation to that feedback:
- Investor categorisation: The FCA makes clear that it considers investor categorisation a key consumer protection tool because it determines both access to investments and the protections available. It remains concerned that retail investors can be inappropriately opted out of protections through Financial Promotion Order exemptions for self-certified sophisticated investors and high-net-worth individuals. The FCA believes the current thresholds are outdated and notes evidence of consumers incorrectly self-certifying or being coached through the process. Respondents broadly supported reform, including additional verification requirements and cooling-off periods. The FCA considers legislative change necessary and will continue engaging with HM Treasury.
- Financial promotions: Respondents identified inconsistencies in the financial promotion regime, with similar-risk products often subject to different marketing restrictions and disclosure requirements. Examples included Contracts for Difference and leveraged Exchange-Traded Products. Concerns were also raised about digital engagement practices, such as copy trading, behavioural nudges and leaderboards, which may encourage speculative behaviour. Some respondents argued that long-term investments such as Long-Term Asset Funds are grouped too closely with speculative investments. Feedback on fractional shares was generally positive, although respondents stressed the importance of distinguishing them from derivative-based products, which carry different risks and protections. Most respondents favoured a more risk-based approach to categorisation, while some supported retaining product-specific rules. The FCA also heard that risk warnings can overemphasise downside risks and discourage investing, particularly where repeated warnings become ineffective. The FCA will review high-risk investment categorisation and consult further on risk disclosures for mainstream investments in H1 2027.
- Pre-sale product and service communications and Model portfolio services: The FCA highlighted ongoing disclosure reforms, including the Consumer Composite Investments regime and proposals to simplify investment disclosures. Respondents generally supported aligning model portfolio service (MPS) disclosures more closely with packaged products to improve comparability and consumer understanding. The FCA is undertaking a multi-firm review of MPS providers, with findings expected in Q1 2027.
- Pre-sale assessments: Respondents broadly supported appropriateness assessments but highlighted concerns about inconsistent application of the rules, particularly the definition of “non-complex” investments. Feedback also suggested that assessment standards vary significantly between firms and may be undermined by consumers using online resources or AI tools. The FCA views appropriateness assessments as an important safeguard and plans further work to assess whether reforms could improve consumer outcomes.