The FCA has published at least six good practice and areas for improvement papers in 2026 so far, and the pace of publication is itself a signal worth paying attention to.
The six papers to date are:
- Multi-firm review of smaller mutual life insurers (16 January) – examining how smaller mutuals meet Consumer Duty requirements and deliver good customer outcomes
- Complex exchange traded products (12 January) – a multi-firm review into how firms evaluate complex ETPs and communicate key risks
- Consumer Duty board reports (9 March) – updated guidance with additional insight for smaller firms
- Sustainability Disclosure Requirements labels (27 February) – good and poor practice for firms using labels under the SDR regime
- Second charge mortgages (12 March) – a review of advice, fees, charges and affordability assessments by intermediaries and lenders
- Consumer understanding (13 March) – findings from a review into firms’ approaches to the consumer understanding outcome
Between the rulebook and the supervisory letter
This is a mechanism that is clearly working well. These papers sit between a rulebook and a daunting supervisory letter, providing firms with concrete, practical examples of what supervisors are actually seeing in the market, without creating new requirements. Firms hear not just what is expected in the abstract, but what good looks like in practice and, crucially, what it does not.
Alongside this series, the FCA has launched an entirely new format: annual Regulatory Priorities reports replacing portfolio letters, giving firms a single one-stop shop for regulatory expectations. Four have already been published: insurance in February and consumer investments, mortgages, and consumer finance in March. Pensions, retail banking, wholesale buy-side, wholesale markets and payments still to follow.
Different topics, one standard
Look across all of these publications and a golden thread connects them: the Consumer Duty. Even where it is not the headline topic, the FCA’s lens and question is the same: can you demonstrate that your customers are actually receiving good outcomes, and can you evidence it?
That single question surfaces in every paper, just framed differently depending on the sector and topic.
- In the smaller mutual life insurers paper, it shows up as: are your products and services genuinely delivering value for the customers who hold them, and do you have the governance and MI to know?
- In the complex ETPs paper, it is: do your customers understand the risks they are taking on, and have you tested that understanding rather than assumed it?
- In the Consumer Duty board reports update, it is perhaps the most direct expression of the thread: does your board actually own this, and is it receiving the right information to be confident that good outcomes are being delivered?
- In the SDR labels paper, it asks: are your sustainability labels accurate, fair and genuinely meaningful to the customers reading them, or are they a marketing tool dressed up as disclosure?
- In the second charge mortgages paper, it translates to: is your advice process, your fee structure and your affordability assessment actually working in the customer’s interest in practice, not just on paper?
- And in the consumer understanding paper, it is stated most explicitly of all: can customers genuinely understand the information you give them, make informed decisions, and pursue their financial objectives as a result?
Strip away the sector-specific detail, and the FCA is asking the same three questions every time.
- First, do you know what outcomes your customers are actually experiencing?
- Second, can you provide evidence that those outcomes meet the standard the Duty requires?
- And third, when you find gaps, do you act on them in a way that is documented, governed and sustainable?
Significantly, the FCA is no longer asking firms whether they have embedded the Consumer Duty. These publications collectively demonstrate that the regulator is now interrogating the quality of implementation. Firms must move beyond intention and demonstrate evidence of meeting Principle 12.
What should firms do in response?
The picture is of a regulator using targeted publications to signal emerging risks, clarify supervisory thinking, and encourage firms to raise standards proactively. Firms that read these papers as interesting but not urgent are misreading the signal. Here is what Square 4 recommends:
- Read across – the Consumer Duty thread means findings on communications, vulnerability and governance apply to all retail firms, not just the sector named on the cover.
- Treat your Regulatory Priorities report as a supervisory checklist – work through each priority and assess whether you can evidence compliance, not just assert it.
- Don’t sit in the comfortable seat – ask honestly whether the weaknesses the FCA describes exist in your business, and if they do, form a plan to address them.
- Move beyond intention – demonstrate outcomes through credible evidence, supported by effective monitoring and clear management action.
- Engage the board – generic updates lacking evidence of effective challenge are not enough; clear ownership and action tracking are the minimum standard.
A Word of Warning: Don’t Dismiss What Doesn’t Feel Relevant
One of the most common mistakes firms make when reading publications like these is deciding, without proper assessment, that the findings simply do not apply to them. The reasoning is familiar: “we have a process for that” or “our sector is different.” It is a comfortable conclusion, but rarely an evidence-based one.
The FCA’s second charge mortgages paper illustrates the risk well. The firms reviewed were not, in many cases, lacking processes; the processes existed. What fell short was how those processes were being executed and monitored in practice. There is a meaningful difference between having a compliant framework on paper and being able to demonstrate it is working as intended every day. Firms that mistake the existence of a process for evidence of a good outcome are precisely the ones most at risk.
Treating these papers as a prompt for genuine self-assessment rather than something to be filed once confirmed as “not applicable” is not just good practice. Under the Consumer Duty, it is the expectation.
Conclusion
The FCA’s output in the first quarter of 2026 is not a coincidence of timing. It reflects a deliberate shift in how the regulator communicates: more targeted, more frequent, and more explicit about where firms are falling short. The Consumer Duty provides the framework, but these publications are where that framework becomes real. Firms that engage seriously, assess themselves honestly, and act on what they find will be better placed not just for regulatory scrutiny, but for the outcomes their customers deserve.
How Square 4 can help
Square 4 helps regulated firms turn FCA publications into clear, actionable steps. If you have questions about your firm’s position, we can help.
We offer Consumer Duty health checks and gap analyses, policy and framework development, board and senior management training and workshops and ongoing compliance support for firms that want an experienced pair of eyes on a retainer basis.
If you would like to discuss how your firm measures up against the FCA’s latest expectations, get in touch at hello@square4.com.
The conversations that happen now are considerably easier
Nicola Crump
Advisory Director
