Regulatory Round-Up: FCA Priorities, Targeted Support and the Rising Role of Inheritance Tax

Rachel MacRae

Hello and welcome back to the B-Compliant Podcast. I’m Rachel, joining our listeners from glamorous Manchester… where the weather is still grey and the regulations are still multiplying. How are you today, Vicky?

Unknown Speaker

I’m very well thanks, Rach. Shall we dive into this episode? We’ve got loads on, but I think it’s good to start with the FCA’s latest Regulatory Priorities reports.

Rachel MacRae

So, the FCA has brought out the second of its new Regulatory Priorities reports. These are basically the replacement for the old portfolio letters. Instead of a one-off letter to your sector, you'll now get an annual summary of what they expect firms to prioritise over the coming year.

Unknown Speaker

And this one’s focused on consumer investments. The overall message is pretty consistent across the sector: support informed risk‑taking, strengthen trust, deliver good consumer outcomes, and keep tackling financial crime and misleading promotions. Nothing shocking in there, but it’s all pulled together in one place.

Rachel MacRae

Yeah, the FCA’s clearly not saying “don’t take risk”; they’re saying “help consumers understand the risk they’re taking.” So that means clear communication, no jargon, proper explanation of fees, risks and potential rewards before people invest. Radical idea, I know.

Unknown Speaker

You mean “meaningful, comprehensible information” instead of “small font and acronyms”? What a time to be alive.

Rachel MacRae

The first priority is building a stronger investment culture. The FCA wants firms helping consumers understand what they’re getting into, and they specifically flag supporting implementation of the new Consumer Composite Investments regime, plus the upcoming changes to the advice framework, including targeted support.

Unknown Speaker

Then we’ve got strengthening trust. That’s where governance, risk management and responsible innovation come in. The FCA talks about resilience as firms grow, merge, or adopt new tech – including AI. And they expect firms to act quickly when risks show up, not have a three‑year transformation project before doing anything.

Rachel MacRae

Next, securing good consumer outcomes. Under Consumer Duty, the FCA expects firms to actively monitor outcomes, show that products offer fair value, and make sure what they’re selling actually meets the needs of all consumers, including those in vulnerable circumstances.

Unknown Speaker

They also say they’ll consult further on how the Duty applies across distribution chains and client categorisation. So if you were secretly hoping the distribution chain discussions were over… they’re not. But at least they’re being upfront about more consultation coming.

Rachel MacRae

And then the final priority: strengthening financial crime controls. The FCA is still very focused on preventing investment fraud and scams, especially anything online or involving “finfluencers”. I love that word; it sounds far more glamorous than the reality of being on the wrong side of a financial promotion rule.

Unknown Speaker

They’re clear that firms should have robust systems and controls, keep a close eye on appointed representatives, and play an active role in protecting consumers from scams. So it’s not just “don’t be a fraudster”, it’s “don’t let fraudsters use your firm as a gateway either”.

Rachel MacRae

If you boil the report down, the FCA keeps coming back to a few themes: clear communications, fair value assessments, strong governance and effective oversight, and solid financial crime controls. All of that is already part of a good compliance framework—this is more of a nudge to make sure it’s actually happening in practice.

Unknown Speaker

So over the coming months, it’s worth reviewing client communications, product governance, financial promotions and your financial crime controls with these priorities in mind. And if you’re feeling particularly brave, the full FCA report is on their website for a proper deep dive.

Rachel MacRae

Moving on, let’s talk about more fun reading: the FCA’s Quarterly Consultation Paper No. 51, also known as CP26/8. Try not to get too excited.

Unknown Speaker

This one is mostly about improving clarity, correcting minor issues, and making sure the rules operate as originally intended.

Rachel MacRae

So if you were bracing for a big policy shift, this isn’t that. It’s still wide‑ranging though. It touches a lot of areas that different firms might be exposed to, so it’s one of those documents where you go, “No, I don’t need all of this… but I probably need a few bits.”

Unknown Speaker

Let’s run through the main areas. First, Client Assets – CASS – particularly how client money and safeguarding rules apply to cryptoasset activities. So if you’re anywhere near crypto, this is one to watch, even though the changes are positioned as clarifications.

Rachel MacRae

Then there are changes to the Market Conduct sourcebook, MAR, to tidy up equity transparency requirements and to clarify where rights of action apply. So again, it’s more of a “straighten the picture on the wall” job than rebuilding the wall.

Unknown Speaker

We’ve also got minor corrections and wording improvements to Consumer Credit regulatory reporting – specifically the CCR009 return. We’ll come back to CCR009 later because that’s popping up in firms’ RegData schedules now.

Rachel MacRae

There are targeted amendments to the Prospectus and UK Listing Rules too, aimed at reducing unnecessary regulatory burden. Not removing regulation, just trying to cut down the “unnecessary” bits—however defined. Answers on a postcard.

Unknown Speaker

They’re also proposing to increase the UK E M I R clearing threshold for commodity derivatives. And there are updates affecting investment firms and authorised funds, including changes related to own funds distributions and the implementation of the revised SORP – the Statement of Recommended Practice.

Rachel MacRae

The consultation deadlines are staggered. Depending on the chapter, responses are due between the 23rd March and the 20th of April 2026.

Unknown Speaker

Right, let’s move to something a bit newer: targeted support. The FCA has opened its authorisation gateway for this, so firms can now apply for permission ahead of the go‑live on 6 April 2026.

Rachel MacRae

Targeted support is being described by the FCA as a “once in a generation” reform. No pressure, then. The whole idea is to help consumers make better‑informed decisions about pensions and investments.

Unknown Speaker

At the moment there’s a long‑recognised gap between generic guidance and full personalised advice. Targeted support is meant to sit in the middle – giving structured suggestions to groups of consumers who share similar characteristics, without becoming full advice in the traditional sense.

Rachel MacRae

The FCA estimates that around 23 million consumers are underserved by current advice and guidance models. So the scale of the issue is pretty clear, even if the exact number will never feel real to most of us. That’s a lot of people who might benefit from something more tailored than generic guidance but not as involved as full advice.

Unknown Speaker

With targeted support, firms that are authorised for this new service will be able to offer structured suggestions that help those groups navigate key financial decisions more confidently and, hopefully, more affordably. The FCA’s positioning it as a big step in improving consumer outcomes.

Rachel MacRae

And the gateway opening is a big milestone in itself because it means firms can start the authorisation process now, rather than having a mad rush at the last minute. Although, let’s be honest, there will probably still be a mad rush at the last minute.

Unknown Speaker

Almost certainly. To support firms through this, the FCA is keeping its Pre‑Application Support Service – PASS – available. That’s there to help firms understand what a good, complete application looks like before they actually submit it.

Rachel MacRae

So if you’re looking at targeted support and thinking, “I’m not sure what the FCA actually wants to see,” PASS is the route where you can ask those questions. Then when you’re ready, both the applications and the PASS forms themselves are submitted via Connect, the FCA’s usual online system.

Unknown Speaker

The key thing is, none of this is about guessing what the FCA might want someday. We’re just summarising how they’ve described targeted support and the process: a once‑in‑a‑generation reform, aimed at those underserved consumers, structured suggestions for groups, and a gateway now open with PASS on hand to guide you

Rachel MacRae

And, as ever, firms can get help pulling together applications, interpreting expectations, and actually loading things into Connect. There’s quite a bit to think through with a new service like this, so going in prepared will make life a lot easier than winging it.

Rachel MacRae

Let’s switch gears and talk about tax. Everyone’s favourite topic. Specifically, the Spring Statement 2026 and the growing importance of inheritance tax planning.

Unknown Speaker

Chancellor Rachel Reeves kept the Statement itself pretty low‑key on the 3rd of March. It was more about reaffirming the existing tax and fiscal direction than launching big new measures. The real detail, especially on inheritance tax – IHT – sits in the Office for Budget Responsibility’s Economic and Fiscal Outlook that came alongside it.

Rachel MacRae

The OBR has looked at IHT reforms announced since the October 2024 Budget. I think we are all aware of these now, but just as a mini recap, the main one is bringing unused pension pots into the scope of IHT from April 2027. There are also reforms to agricultural and business property reliefs (although we did see some revisions to this late last year from what was originally announced in 2024)

Unknown Speaker

According to the OBR, these IHT changes are forecast to account for around 14% of total IHT receipts by the end of the 2030/31 financial year. So while the Statement didn’t feel dramatic on the day, the long‑term numbers show IHT becoming more significant within the fiscal framework.

Rachel MacRae

They explain that IHT receipts are being pushed higher by frozen tax thresholds, rising house prices, rising equity prices, and a growing share of estates falling into the IHT net. On that basis, receipts are forecast to reach 9 billion pounds in 2025/26, rising steadily to 15 billion pounds by 2030/31.

Unknown Speaker

Compared with the OBR’s November forecast, receipts are expected to be broadly unchanged in the near term, but around 300 million pounds a year higher later on. That’s largely down to stronger forecast equity prices, according to the OBR’s analysis.

Rachel MacRae

But they’re also very clear that these projections are uncertain. The big unknown is behavioural responses – how people might change their planning when pensions come into scope for IHT. The OBR describes the tax base for inheritable pension wealth as “particularly uncertain” which is economist‑speak for “this might move around quite a bit”.

Unknown Speaker

There are also policy adjustments coming in from December 2025 announcements. One example is the increase in the allowance for 100% agricultural and business property relief from 1 million pounds to 2.5 million pounds , from April 2026. The OBR expects that to reduce IHT receipts by around 100 million pounds in the medium term, partially offsetting the impact of other reforms.

Rachel MacRae

All of this is set against a backdrop of heightened geopolitical uncertainty. The OBR points out that international tensions, especially anything affecting energy markets, inflation and asset prices, could materially change the economic assumptions behind the forecasts.

Unknown Speaker

So, while IHT is clearly becoming more important in the projections, the OBR is careful to say that the long‑term path is subject to significant risk. Market conditions or changes in economic growth could shift the trajectory of receipts, including those linked to pensions and other assets.

Rachel MacRae

If you look at the overall message, it’s: the Spring Statement is about stability on the surface, but the OBR’s analysis shows IHT playing a growing role in the government’s fiscal picture—just with a lot of uncertainty layered on top.

Unknown Speaker

For our final section, let’s bring it back to something very practical: reporting and authorisation forms. Because who doesn’t love a good form?

Rachel MacRae

First up, CCR 0 0 9. Firms with consumer credit permissions will probably have noticed that the CCR 0 0 9 return has now appeared in their RegData schedules. We’ve been supporting a lot of firms with it recently, and the headline is: it looks scary, but it’s dynamic.

Unknown Speaker

On first glance, some versions of the form can run to about 75 pages of questions, which is enough to ruin anybody’s Friday afternoon. But the key point is, most firms are very unlikely to complete a form of that length because it expands and contracts based on your answers and your permissions.

Rachel MacRae

So if you only hold limited permissions – things like debt counselling or credit broking for protection or general insurance – the form tends to be much shorter and relatively straightforward. It’s not automatically a 75‑page epic.

Unknown Speaker

That said, we’ve seen that for mortgage brokers in particular, some sections feel less clear. The underlying questions can be harder to interpret from that perspective, so a bit of extra guidance can be useful just to make sure you’re answering in the way the FCA expects.

Rachel MacRae

We’re currently working with a lot of firms on CCR 0 0 9 – either helping complete the return or reviewing draft responses. So if you look at it and your first reaction is, “Nope,” that is a perfectly normal response.

Unknown Speaker

Now, linked to that, there have also been some changes to FCA authorisation applications via Connect that are worth flagging. When, you create an application now, the Retail Supplement form is segmented based on the activities you’re proposing.

Rachel MacRae

So, for example, firms get directed to different versions depending on whether they plan to advise on investments and non‑investment insurance, investments only, home finance, pensions including Sips, or a combination. It’s more tailored to your activities, rather than one giant catch‑all form.

Unknown Speaker

One slightly quirky point is for Article 3 firms. The initial form to create the application no longer lets you select investments and pensions together – it has to be one or the other. From what we’ve seen, advising on pensions can still be covered where firms select investments only, or investments plus other activities like non‑investment insurance. But the way it’s presented in the application is different, so it’s worth paying attention.

Rachel MacRae

We’ve also noticed a bigger emphasis in the revised forms on the firm’s investment proposition. They ask for more detail on how you determined it, the due diligence you carried out, and the rationale for the products and services you’ve chosen.

Unknown Speaker

We’ve always said that should sit clearly in your business plan, and that’s still true. The difference now is that the application forms themselves are asking you to capture that detail directly, not just attach a document and hope someone reads it.

Rachel MacRae

So, between CCR 0 0 9 and the updated authorisation questions, the theme is fairly clear: more tailored, more detailed, and occasionally more confusing at first glance. But it is all within the FCA’s existing framework – we’re just describing what they’ve already put out there.

Unknown Speaker

If you’re dealing with any of this, or just trying to interpret the FCA’s priorities – don’t feel you have to sit there in silence with a 75‑page form and a cup of cold coffee.

Unknown Speaker

Thanks for listening. We’ll be back with more regulatory highlights soon! Rachel, thanks as always.

Rachel MacRae

Thanks Vicky, and thanks everyone for joining us. Take care, and bye for now.