Earlier this week, the Investment Association Affiliate Member Update took place at their London office, where Karen Northey, Director of Corporate Affairs, walked us through the government’s latest plans for the financial services sector. The session followed the Chancellor’s Mansion House speech and offered a helpful breakdown of what’s coming, and what it means for our industry.
Below is a summary of the key announcements and what they could mean for our industry:
Regulatory reform: SMCR gets a makeover
The government is aiming to cut regulatory burden by 50%, starting with the Senior Managers & Certification Regime (SMCR). This includes removing the Certification Regime from legislation and reducing the number of roles requiring pre-approval by around 40% for banks and insurers.
Approval timelines for senior managers will be shortened from three months to two, and the FCA and PRA will aim to beat those targets. These changes apply to individual authorisations only, fund authorisation remains unchanged for now.
Skills and talent: A national focus
To support long-term growth, the government will establish a new Skills Council to attract the right expertise into the industry and into the UK. This aligns with the broader strategy to make the UK the global location of choice for financial services firms to invest, innovate, and grow.
ISAs and retail investment: Moving beyond cash
The government wants to encourage savers to move their money out of cash and into investments. This includes reducing barriers like minimum investment amounts and lack of accessible information and expanding the ISA wrapper to include Long-Term Asset Funds (LTAFs) from April 2026.
We are also seeing reforms to the advice landscape, with the introduction of Targeted Support and Simplified Advice alongside traditional investment advice. Updates to COBS rules are expected soon.
Risk warnings and public engagement
The Chancellor believes current risk warnings are too prominent and may deter potential investors from exploring investment services and products. A formal review is expected to begin in January 2026, and an industry-funded media campaign will launch to promote the benefits of investing across TV and digital platforms.
Taxation: No news (yet)
There were no updates on changes to the tax regime for Stamp Duty or UK-domiciled funds. However, the government is keeping these areas under review, and we may know more at the next budget statement expected in Oct/Nov.
Consumer Duty
The FCA have been asked to review the implementation of Consumer Duty and amend regulation where it is causing significant issues in the Wholesale market.
What’s next?
If you want a more detailed analysis of what the Chancellor and HM Treasury are planning, please contact us for further information. While these are only proposals, there are some key changes which will change the way that firms operate if implemented by the FCA.
This post contains a general summary of advice and is not a complete or definitive statement of the law. Specific advice should be obtained where appropriate.
