On 30 September 2025, the FCA published three linked updates on the Consumer Duty: a review of how the requirements are working in practice, a letter from chief executive Nikhil Rathi to the Chancellor on the Duty’s application to wholesale firms, and a new webpage setting out focus areas for 2025/26. Taken together, they mark a shift in tone — from a regulator embedding a brand-new standard to one refining how that standard is applied. 

A MORE PROPORTIONATE APPROACH TO WHOLESALE FIRMS 

The letter to the Chancellor sets out a four-point plan aimed squarely at reducing the burden on firms whose activities are predominantly wholesale rather than retail. Expect clearer guidance on scope, updates to client categorisation rules, changes to how the Duty applies across distribution chains, and proposals to take business with non-UK customers out of scope. None of this weakens the Duty’s core standard — firms still must act in good faith, avoid foreseeable harm, and support customers in pursuing their financial objectives — but it should reduce the guesswork for firms operating several steps back from the end retail customer. 

In practice, the letter draws the line by role rather than by sector. The FCA describes wholesale market activity as largely outside the Duty’s scope, and has already exempted some activities, such as offers of simple bonds and listed equities and sales of investment products with a high minimum value. It also accepts that some firms, driven by uncertainty about its expectations, have taken an unduly prescriptive or administrative approach and gone further than it intended. The direction of travel is therefore less effort spent proving that a business-to-business activity has no material impact on retail customers, and less duplicated work between firms that manufacture products together. Firms dealing with professional clients should also gain a clearer basis for treating them outside the Duty once the client categorisation framework is updated. 

What does not go away is accountability for the end outcome. The Duty still applies where a wholesale firm creates products or services intended for sale to retail consumers, and the FCA expects firms higher up a distribution chain to consider end consumers’ interests in how they design, value, describe and monitor those products. The letter points to weaknesses found in the retail structured products market as the kind of failure it does not want repeated. A firm several steps back should therefore still be able to evidence why it concluded that its activities do or do not materially affect retail outcomes; who the intended end customers are and how the product or service was designed with them in mind; what information it shares with distributors and what monitoring information it receives back; and, where it relies on another firm in the chain, the basis for that reliance. The FCA has said it will consider making clear when and how firms can rely on each other, but that clarity is still to come, so firms should assume they need to be able to show their reasoning. 

FOUR CROSS-CUTTING REVIEWS FOR 2025/26 

The FCA has confirmed it will run multi-firm reviews across: 

• Products and services outcomes 

• How firms monitor and evidence outcomes 

• Customer journey design, including where firms introduce unnecessary friction 

• The consumer understanding outcome, focused on the clarity of communications 

Firms should expect data requests tied to these reviews, and should assume that “we followed the rules” will not be a sufficient answer — the FCA wants to see monitoring data that demonstrates good outcomes were delivered, not just designed for. 

DISCLOSURE RULES ARE FINALLY CATCHING UP 

One of the more practically useful commitments is a promise to simplify legacy disclosure rules that sit awkwardly alongside the Duty’s consumer understanding outcome. Retail disclosure reforms are expected in Q4 2025, APR, and cost disclosure changes in 2026, and a review of retail banking disclosure rules is also in train. (Source: FCA, Consumer Duty requirements review: update) Firms that have been bolting Consumer Duty language onto pre-2023 disclosure templates should watch this space closely. 

WHY THIS MATTERS FOR RISK AND COMPLIANCE TEAMS 

The direction of travel is clear: outcomes monitoring is no longer a nice-to-have overlay on top of existing MI. It is becoming the primary evidence base the FCA expects firms to hold. Firms still relying on ad hoc spreadsheets or annual board papers to demonstrate Consumer Duty compliance will find that increasingly hard to defend against a regulator asking for granular, ongoing outcomes data. 

MANAGING CONSUMER DUTY EVIDENCE WITH REGTECH 

Consumer Duty compliance is fundamentally an evidence problem: can a firm show, continuously and consistently, that its products, communications and customer journeys are delivering good outcomes? The Axiol platform supports this by: 

• Mapping Consumer Duty obligations directly onto a firm’s control framework, so ownership and evidence requirements are clear at a glance 

• Capturing outcomes monitoring data on a rolling basis rather than as a point-in-time exercise 

• Flagging where controls have weakened before they become the subject of a regulator’s multi-firm review 

• Producing board-ready reporting that shows, not just tells, how the Duty is being embedded 

As the FCA shifts its Consumer Duty supervision from launch mode to testing outcomes, firms need tooling that keeps pace. Get in touch to see how Axiol can help.