FCA consults on overhauling investment cost disclosures: action required by 21 August

Action required. Platforms, advisers and wealth managers.

The FCA published CP26/24 on 2 July 2026, consulting on simplified rules for how firms communicate all investment costs to retail clients, covering products, distribution and advice charges. The consultation closes 21 August 2026. Final rules are expected before the end of 2026, with a mandatory compliance deadline of June 2028 following an 18-month transition window.

The driver is straightforward: the FCA's own review found that of 132 pre-sale disclosure documents examined for readability, only 6% were written in plain English, and all were more complex than GCSE level. Separately, 30% of non-advised platform users said they did not know how much they are charged for investing. The proposals are a direct response to both findings.

At the pre-sale stage, distributors would present their own costs alongside product costs in a format consistent with the Consumer Composite Investments (CCI) framework, which replaces PRIIPs and UCITS disclosure documents from 8 June 2027. Firms must show a single consolidated figure for ongoing product costs plus their own service and distribution fees, with one-off entry and exit fees, transaction costs, performance fees and underlying closed-ended fund costs shown separately. Post-sale, costs must still be expressed in both pounds and pence and as a percentage, but firms gain flexibility to structure those statements to mirror the pre-sale layout.

Two specific changes are worth flagging. First, the MiFID-derived cumulative-effect illustration: the projection showing how compounding charges erode returns over time. This would be removed at both pre-sale and post-sale stages, replaced by a requirement to show how costs have actually impacted returns in periodic reporting. Second, the FCA proposes to codify a ban on "double dipping": firms both charging fees and retaining interest on client cash simultaneously, aligning the rules with its 2023 Dear CEO Letter.

The currently fragmented rules across MiFID, the Insurance Distribution Directive (IDD) and non-MiFID business would be consolidated into a single chapter of the Conduct of Business Sourcebook (COBS 6A), removing parallel compliance streams. Most prescriptive requirements for professional client business would be removed, though core cost disclosure obligations remain.

Where sourcing exact cost data would be disproportionately burdensome, firms may use a reasonable estimate rather than a precise calculation. The FCA's cost-benefit analysis puts one-off transition costs at around £20.1m across approximately 5,300 affected firms.

Linklaters notes that firms moving away from template disclosures will need to think carefully about how they evidence compliance. A clear record of the judgements made and why will matter more than a completed form.

Read the consultation and respond by 21 August 2026 if the proposals affect your firm.

Sources

• Financial regulator simplify investment disclosure regimefca.org.uk
• FCA to simplify investment disclosure regime CP 26 24financialregulation.linklaters.com
• FCA consults on simplifying consumer investment disclosures under the cci regimesolvencyanalytics.com