The FCA’s latest consultation paper proposes changes to the retail investment disclosures. Thistle Initiatives consultant, Sophia Ioannou, delves into the proposed reforms and what they could mean for firms.
The FCA has conducted a review of the effectiveness of pre-sale investment disclosure documents for consumers and has published a consultation paper which sets out proposed changes to retail investment disclosures, with a focus on simplifying cost and charges information and creating a consistent disclosure framework. These changes aim to ensure consumers are provided with clearer information and to ensure firms support customers by providing transparency and better customer outcomes.
The consultation is open until Friday, 21 August 2026.
The consultation paper is relevant for industry groups, trade bodies, consumers and consumer groups and manufacturers of Composite Consumer Investments (CCI) and other investments.
Multi-firm Review
By conducting a multi-firm review of pre-sale investment disclosure documents, the FCA aimed to assess the effectiveness of pre-sale investment disclosure documents in supporting consumer understanding. The FCA’s review found that the majority of pre-sale investment disclosure documents (94%) were regarded as difficult to read or fairly difficult to read. In addition to this, the review found that investment disclosures were often complex due to the use of technical language, drafting choices and industry jargon. This highlights a need to improve the clarity and consumer understanding of investment disclosures.
What Are The Proposed Reforms?
1. Cost and Charges
The FCA’s proposed rules aim to simplify how investment costs are understood by consumers by implementing consistent disclosure frameworks which are aligned with the CCI regime. Firms would provide information regarding ongoing product and service costs and also disclose any transaction charges, one-off charges and performance fees. By simplifying the costs and charges through creating a more consistent disclosure framework, the reforms intend to enhance transparency, improve customer understanding and ensure good customer outcomes are achieved.
2. Cash Holdings
The FCA proposes to strengthen consumer protections by improving disclosures on cash balance interest and charges to ensure that firms do not benefit from interest while also charging fees on the same cash balances. The proposed reforms would require firms to explain to consumers how the interest on cash balances is calculated and paid. The FCA proposes that firms must provide consumers with disclosures on expected interest and fees. For post-sale reporting, information must be disclosed on the interest earned and fees charged on an ongoing basis.
3. Simplifying and Streamlining Disclosures
The FCA proposes to simplify and streamline the disclosures by consolidating and combining existing MiFID, Insurance Distribution Directive (IDD) and non-MiFID rules, by creating a new handbook chapter within COBS. These proposed reforms aim to limit the complexity of regulation, remove the distinctions between different types of business and focus on creating a consistent regulatory framework for firms.
What Does This Mean for Firms?
The multi-firm review conducted allows the FCA to understand areas where reforms are necessary to ensure good customer understanding is a priority. The proposed reforms are intended to increase clarity and strengthen regulatory framework standards by enhancing consistency across requirements, improving the alignment of regulatory standards and reducing complexity with regard to Consumer Investment disclosures. This should support better understanding and more consistent application by firms while also enhancing consumer understanding and outcomes.
How Thistle Initiatives Can Help
Thistle Initiatives works alongside advice firms to help them respond confidently to regulatory expectations, whether they are growing, restructuring or refining their proposition. We can help you understand what the consultation and the proposed changes mean in practice and support the enhancement of a firm’s framework, ensuring consistent standards are applied throughout the business and market.
Meet the Expert
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Sophia Ioannou, Consultant 
Sophia recently joined Thistle as a Consultant in the Investment Wholesale team. She holds a Bachelor of Science in Psychology from the University of Nottingham and brings a strong foundation in investment compliance. Before joining Thistle, she worked at a hedge fund where she supported regulatory development projects and contributed to policy reviews, giving her practical insight into how firms adapt to emerging requirements. She has also completed the CISI Introduction to Securities and Investment and Global Financial Compliance modules, which further strengthened her technical knowledge.