The Financial Conduct Authority announced on Thursday that it is consulting on a set of proposals intended to simplify and standardize how firms communicate investment costs to consumers. The regulator said the aim is to create a consistent disclosure framework that would apply across platforms, advisers and wealth managers.
Under the consultation, firms that distribute investment products would be expected to present their own charges alongside the costs embedded in the products themselves. Both sets of figures would be reported using the Consumer Composite Investments - CCI - format when products are sold, and firms would be expected to account regularly for the total cost of investing.
The regulator highlighted that a sizeable proportion of platform users are unclear about the charges they face: 30% of non-advised platform users do not know how much they are charged for investing, according to the FCA. To address that information gap, the proposals would require communications to retail investors to be written in plain English rather than industry jargon, while also giving firms flexibility to experiment with how they present information in order to build trust and support informed decision-making.
Proposals in the consultation also include rules governing firms' consumer disclosures where firms either charge fees on client cash or pay interest to clients on cash holdings. The FCA set out these measures as part of a broader effort to make pre-sale and ongoing disclosures easier to understand.
Lucy Castledine, the FCA's director of consumer investments, said: "We want more consumers to feel confident investing by getting clearer information in plain English on products and charges. The changes will give firms more freedom to innovate and communicate in ways that build trust and support informed decisions to help consumers navigate their financial lives."
The FCA simultaneously published findings from a review of existing pre-sale investment disclosure documents. The review examined 132 documents for readability and found that only 6% were written in plain English. The FCA further noted that all of the documents assessed were more complex than GCSE level.
Looking ahead, firms will be required to follow the FCA's CCI rules from June 2027, rules that were finalised in 2025. Compliance with those rules will necessitate changes in how firms explain investments to consumers prior to purchase.
Context and next steps
The consultation opens a period in which the FCA expects industry input on the proposed disclosure approach, wording standards and the mechanics of presenting combined distributor and product costs in the CCI format. After the consultation period and any subsequent policy finalisation, firms will have a defined timetable to implement the required changes before the June 2027 compliance date.