On 29th April, the Financial Conduct Authority (FCA) published details of the number of Skilled Persons Reports commissioned in 2024/25 Q4 (1 January – 31 March 2025). With this latest set of data published, we have undertaken analysis of the full 12 month’s data and have outlined some of the key trends, our observations and how firms can best prepare themselves should they be subject to a Skilled Person review.
Some background before diving into the data
Skilled Person reviews are a tool used by the FCA to assess specific areas of concern within a regulated firm, such as conduct, financial controls, systems and controls, or governance. When the FCA contracts with a Skilled Person, it gives them a formal direction to investigate, review, or report on specific issues, and these findings are used to inform regulatory decisions. Depending on the findings, the FCA may require the firm to take remedial actions, which could include undertaking remediation programmes, improving internal controls or changes to business practices. In some cases, the findings could lead to enforcement actions, including fines or restrictions on business activities.
The FCA data
Our analysis of the data highlights a total of 48 Skilled Person reviews commissioned across 2024/25 in all sectors. Whilst this represents a 60% decrease in the number of Skilled Person reviews commissioned this year, compared to 2023/24 (in which 80 were commissioned), this year’s total is consistent with previous years.
It is also important to remember that last year saw the highest number commissioned since the inception of the FCA in 2013, largely owing to the rise in APP scams and payment fraud, and associated Financial Crime control failings observed across firms.
Quarterly Highlights for 2024/25:
- Q1 (April – June 2024): The FCA commissioned 14 Skilled Person Reports, with six relating to the insurance sector —nearly matching the total for the entire previous year. Additionally, four reports focused on governance, accountability, strategy, and culture, while five covered conduct of business.
- Q2 (July – September 2024): Another 14 reports were commissioned, covering areas such as consumer investments, insurance, wholesale markets, client assets, conduct of business, technology and information management, controls and risk management frameworks, and financial crime.
- Q3 (October – December 2024): The FCA commissioned 13 reports, focusing on consumer finance, consumer investments, insurance, payments and digital assets, wholesale markets, governance, accountability, strategy, culture, controls and risk management frameworks, conduct of business, and financial crime.
- Q4 (January – March 2025): Another seven reports were commissioned, of which six were in consumer investments and one in wholesale markets.
Interestingly there were fewer Skilled Person reviews in Q4 of 2024/25 than in each of the previous quarters. This may in part be due to the FCA’s new strategy – “Deepening trust, rebalancing risk, supporting growth, improving lives”.
In terms of review areas, 25 of the 48 reviews commissioned cover Lot C (Controls and Risk Management Framework) and Lot E (Financial Crime) with the bulk of these within Consumer Investments (22).
Reviews conducted within the Retail Lending sector remain low with one review in Consumer Finance, and none in Retail Banking.
And finally, the number of Conduct of Business (Lot D) reviews account for 25%. This number has remained relatively static over the last five years although interestingly, there has been a continued marginal reduction since the implementation of Consumer Duty. Given the FCA’s priority and continued focus on embedding all aspects of the Consumer Duty, we may see a slight uptick in this area going forward, particularly in light of the FCA’s cross-cutting projects
- Review of board/governing body reports and complaints and root cause analysis – Assessing how firms are responding to outcomes monitoring requirements, for example through review of Board reports and how firms are using insight from their complaints to identify systemic issues and improve business practices;
- Review of treatment of customers in vulnerable circumstances – Assessing firms’ approach to the treatment of customers in vulnerable circumstances; and
- Review of consumer support outcome and supporting informed decision-making – Looking at how firms support their customers across the customer journey and how they are using communications to support informed consumer decision-making.
What’s behind this approach?
As part of its 2025-2030 strategy published in March 2025, the FCA has outlined a strong focus on supporting growth and being a more predictable, purposeful and proportionate regulator. Much of this renewed strategy will have been shaped by the government’s increased pressure on the FCA to support growth. The focus is clear:
- Be a smarter regulator. This includes improving processes and embracing technology to become more efficient and effective.
- Support growth by enabling investment, innovation and ensuring continued competitiveness of the market.
- Help consumers navigate their financial lives by working with the industry to boost trust, product innovation and ensuring the right information and support is available.
- Fight crime, focusing on those who seek to use the fact that they’re regulated to do harm. Going further to disrupt criminals and support firms to be an effective line of defence.
Several of these focus areas will be delivered via existing regulatory developments such as targeted support, mortgage affordability, value for money frameworks and the treatment of customers in vulnerable circumstances. Underpinning each of these priorities is the Consumer Duty, which is integral to how regulated financial firms treat their customers, with a continued focus on outcomes.
We know through our support of firms and our wider industry engagement the volume of issues firms are currently dealing with is extensive. Critical areas of regulatory focus include affordability and responsible lending, ensuring customers received fair value, supporting customers in financial difficulty, complaints, vulnerable customers, evidencing outcomes and firms’ ability to evidence robust governance.
Conclusion
Whilst the FCA’s strategy is very much growth focussed, to maintain and deepen trust, the FCA has pledged to continually show that it is an efficient and effective regulator, one that is proportionate and predictable.
Although the number of reviews commissioned this year did not increase, it was consistent with previous years. This highlights the FCA’s continued oversight and proactive approach to regulation since the introduction of the Consumer Duty, aiming to prevent issues before they escalate, ultimately ensuring a fair, transparent, and secure financial market for consumers and businesses.
How can Square 4 help?
At Square 4 we specialise in regulatory compliance across the FCA agenda throughout Wealth, Retail Lending and Insurance. Our specialist consultants can support as a Skilled Person or supporting your in-house team to deliver against the Requirement Notice.
Please contact us at hello@square4.com should you wish to discuss how we might be able to support your firm further.
