The Financial Conduct Authority (FCA) has introduced a new way of communicating its expectations to the financial services sectors. In February, the regulator published the first of its Regulatory Priorities reports, designed to give firms clearer visibility of the risks, supervisory focus areas and expectations shaping the year ahead.
These reports are expected to become the FCA’s central annual communication for each sector, offering a more structured view of regulatory priorities. For consumer investment firms, the message is straightforward: these reports should be treated as essential reading for boards and compliance leaders.
Each report outlines the work the FCA has undertaken in the sector, the risks it believes require attention, and, most importantly, what firms are expected to do in response. Organisations are expected to review the report relevant to their sector and assess whether their governance, monitoring processes and customer outcomes align with the regulator’s expectations. Where gaps exist, firms should establish clear remediation plans with defined ownership, timelines and oversight.
Organisations are expected to review the report relevant to their sector and assess whether their governance, monitoring processes and customer outcomes align with the regulator’s expectations. Where gaps exist, firms should establish clear remediation plans with defined ownership, timelines and oversight.
The FCA’s four priorities for consumer investments
In its consumer investments report, published on 4th March, the FCA identifies four strategic priorities:
- Building a stronger investment culture
- Strengthening trust in the market
- Securing good consumer outcomes
- Improving financial crime controls
These priorities sit within the FCA’s wider regulatory strategy and signal where supervisory scrutiny is likely to increase over the coming year. Their importance was reinforced by Lucy Castledine, Director of Consumer Investments at the FCA, during remarks at The Investing and Saving Alliance (TISA) Inclusive Investing Conference. She emphasised that the report should serve as a guide for boards and executive teams when assessing how well their firms are meeting regulatory expectations.
For firms, the report goes beyond high-level strategy. The FCA outlines 11 specific expectations, several of which directly affect how firms monitor customer interactions, assess product value and demonstrate compliance with the regulator’s consumer protection objectives.
Key areas in particular stand out…
Demonstrating fair value under Consumer Duty
The first is the requirement for firms to clearly demonstrate fair value in the products and services they offer.
Fair value is a core pillar of the FCA’s Consumer Duty framework, which requires firms to ensure customers receive products and services that represent appropriate value relative to their cost. The regulator recently confirmed it’s investigating several firms for potential breaches of fair value requirements, signalling that enforcement activity in this area may increase.
For many firms, fair value assessments have traditionally relied on internal reviews and pricing analysis. However, the FCA increasingly expects firms to provide evidence that customers are actually receiving the value firms claim to deliver.
This requires a more data-driven approach. Firms need to demonstrate how value assessments are conducted, what information informs pricing decisions, and how value is monitored over time.
Crucially, firms need to demonstrate that customer outcomes align with the intended benefits of their products or services.
As a result, compliance teams should be placing greater emphasis on customer interaction monitoring, using data from calls, messages and digital communications to verify how products are explained, sold and serviced in practice.
Product design and target market oversight
Another key focus of the report is product design and distribution governance.
The FCA expects firms to define clear target markets for their products and ensure that distribution channels remain aligned with those intended customers. This means firms must maintain oversight of how products are sold and ensure that sales practices reflect the characteristics and needs of the target market.
The regulator is also placing strong emphasis on customers in vulnerable circumstances. Firms must demonstrate that vulnerability considerations are embedded throughout the product lifecycle, including design, distribution strategies and ongoing monitoring.
For many organisations, meeting these expectations requires greater visibility into real customer interactions. It’s no longer sufficient to rely solely on policy frameworks or training programmes. Firms increasingly need to analyse interaction data to confirm that advice processes and sales conversations reflect their intended product governance approach.
Outcomes monitoring is becoming a regulatory expectation
Across the report, one theme appears consistently: the importance of monitoring customer outcomes.
The FCA expects firms to produce meaningful management information (MI) that allows them to assess whether customers are receiving products that meet their needs and deliver the intended outcomes. In other words, compliance should be supported by evidence, not assumptions.
Producing this insight can be challenging. Consumer investment firms often handle large volumes of customer communications across multiple channels, making it difficult to review interactions manually or identify emerging risks.
However, effective Consumer Duty monitoring increasingly depends on the ability to analyse these interactions at scale. By identifying patterns in advice conversations, product explanations and service interactions, firms can detect potential mis-selling risks or conduct issues earlier and take corrective action before they become regulatory concerns.
For CROs and CTOs, this makes outcomes monitoring both a compliance challenge and a data challenge. Firms need systems capable of capturing relevant interactions, analysing them efficiently and producing actionable insights for risk and compliance teams.
Ongoing advice services under review
The FCA’s report also provides insight into the regulator’s planned supervisory activity.
One notable area is ongoing advice services. The FCA confirmed that it will conduct follow-up work in the first half of the year, asking firms to demonstrate what steps they have taken since the publication of its February 2025 paper on the topic.
Firms offering ongoing advice will need to show that customers paying for these services are receiving the support and engagement they were promised. This may involve demonstrating that regular reviews are taking place and that the service continues to deliver value to customers.
Technology is becoming central to regulatory compliance
The FCA’s Regulatory Priorities highlight a broader trend in financial services regulation: compliance increasingly depends on operational visibility and data-driven monitoring.
To demonstrate fair value, monitor customer outcomes and ensure products reach the right customers, firms need clear insight into how services are delivered across real customer interactions. This is particularly important as regulators move away from purely policy-based compliance and toward evidence-based supervision.
For many regulated firms, this means investing in technology that can capture and analyse large volumes of customer interaction data. Automated monitoring and AI-driven analysis can help compliance teams identify risks earlier, strengthen Consumer Duty oversight and respond more confidently to regulatory enquiries.
As the FCA’s new reporting framework takes hold, firms that build stronger monitoring capabilities will be better positioned not only to meet regulatory expectations but also to strengthen trust and transparency in the consumer investment market.
How Recordsure can help
Recordsure helps financial services firms gain clearer visibility and oversight of customer interactions and analyse communications at scale. Firms can better monitor advice processes, identify potential conduct risks and generate the management information needed to support the regulator’s expectations, such as Consumer Duty and fair value oversight.
If you’d like to explore how customer interactions oversight can support your compliance and risk teams, feel free to get in touch for an introductory conversation.
