UK FCA discusses possible changes to its rules regarding consumer access to investments

On 8 December 2025, the FCA published a discussion paper entitled “Expanding Consumer Access to Investments”. In it, the FCA explores – and seeks feedback on – various ways in which it can change the existing regulatory framework in order to help consumers access investments that suit their circumstances.

The main points of interest from the discussion paper are as follows:

• Financial promotion marketing categories

The FCA rules currently have different categories of investment, to which different financial promotion rules apply. These include:

• “Restricted Mass Market Investments” (RMMIs) – which can only be mass-marketed to retail customers subject to certain conditions. Investments in this category include qualifying cryptoassets, crypto exchange-traded notes (cETNs) and shares or bonds in unlisted companies.
• “Non-Mass Market Investments” (MMIs) – which cannot be mass-marketed to retail customers. Investments in this category include non-mainstream pooled investments (such as unregulated funds) and speculative illiquid securities.

In the DP, the FCA is asking for feedback on whether those marketing categories are consistent classifying investments based on their risk profiles. The FCA also asks if there are ways in which their financial promotion rules could be improved to help enable informed risk-taking and mitigating harm.

This may present an opportunity for firms who are not happy with the current restrictions to suggest alternative approaches.

• Trading apps and digital engagement practices

The FCA notes the increased use of non-advised trading apps, particular among younger consumers. It notes that the apps often incorporate features and design elements which are designed to reduce friction in the consumer journey but which may also include potentially harmful elements of gamification. The FCA says there is evidence that apps with five or more “engagement features” experience significantly worse returns – although other factors may be in play.

The FCA is seeking views on whether the existing regulatory framework is sufficient to mitigate against these risks.

• Fractional investments

The fractionalisation of investments (for example, to create fractional shares) normally involves giving the customer an exposure to the underlying investment. In some cases – e.g. where the customer is given an “interest” in an actual share that is actually owned by someone else – that involves a similar risk profile to owning the actual share. However, some other structures through which fractionalisation is achieved – in particular, through the use of derivatives – have a different risk profile.

The FCA is seeking views on how its rules could better address the opportunities and the risks of fractional investments.

• Model portfolio services

Model portfolio services (MPS) help consumers access pre-set diversified portfolios targeted to their financial needs and risk appetites. The FCA notes that, to a retail consumer, a model portfolio is likely to look like a single managed product (such as an authorised fund) but that model portfolios are not subject to comparable conduct of business, product or disclosure rules as funds. The FCA notes that MPS disclosures can be inconsistent, and that risk-related labels such as “cautious” or “adventurous” do not allow for direct comparison with authorised funds.

The FCA is floating the possibility of standardising disclosures between funds and model portfolios, to allow better comparisons.

The FCA is also interested in views on outcomes-based rules, alongside the Consumer Duty, for MPS firms to follow when designing and managing a model portfolio. Such rules could address matters such as investment powers, liquidity profile and management, and fair treatment in carrying out client orders.

• Speculative products

Products mentioned in the discussion paper as examples of speculative products are: CFDs, leveraged exchange traded products, margin lending, structured products, cryptoassets proxies (e.g. shares in listed companies that mainly hold cryptoassets) and “horizon contracts” (described as being something emerging from other countries and which allows consumers to speculate on future outcomes such as politics or commodity prices).

The FCA notes that there are many speculative products in the market, and that those products are regulated inconsistently in terms of (i) the risk information or frictions that the regulators apply, and (ii) product specific limitations and how accessible they are to different groups of retail consumers.

The FCA is considering whether a more consistent regulatory approach is needed which focuses on the nature of the risk rather than the product label. The FCA says that this could help consumers better understand and compare products and facilitate protections that are aligned with the risk involved.

• Peer-to-peer lending

The FCA notes that there has been a contraction in the market for peer-to-peer lending (P2P). P2P loans are classified as restricted mass market investments (RMMIs) under the current regime, which means that there are restrictions on how they can be promoted to retail clients. P2P loans are also not covered by the Financial Services Compensation Scheme.

In the discussion paper, the FCA says that it feels that the current policy position on P2P strikes the right balance. Nevertheless, it is asking whether there are any further interventions it should pursue to protect consumers and ensure appropriate consumer access to P2P products.

• Appropriateness

For all but non-complex products, the FCA rules require a firm to make an assessment of whether a product is appropriate for a customer, taking into account the customer’s knowledge and experience.

In the discussion paper, the FCA asks for views on whether changes to the current test are needed. It notes, in particular, that the definition of “non-complex” leaves room for interpretation, and asks whether the scope of the rules should be clarified. That could affect firms who have already made decisions about whether an instrument is non-complex.

• Consumer duty

The FCA is undertaking a wider review of the Consumer Duty, and in September 2025 it highlighted a number of specific areas that it was considering. The discussion paper appears to be part of the continuation of that exercise, and the FCA is specifically asking whether there are ways in which it can streamline and/or clarify how its financial promotion and distribution rules interact with the Consumer Duty.

• FPO exemptions for high net worth customers

Under the Financial Promotion Order (FPO), there are exemptions which permit financial promotions to be made to certain categories of high net worth customer without restriction. To take one example, there is an exemption for promotions of certain products to a person who has an annual income of £100,000 or more, or net assets of £250,000, and who has signed a statement agreeing to receive promotions of that nature.

In the discussion paper, the FCA expresses concern that the thresholds for these exemptions are too low (particularly when compared to similar restrictions in the regimes of other countries) and that consumers may be inappropriately opting out of protections.

The FCA is unable to change the criteria itself because the exemptions exist in legislation and cannot be amended by anyone other than Parliament. In the DP, the FCA asks whether there are other interventions that the FCA can make to protect consumers from the harm caused by these promotions. In practice, the FCA may also be trying to apply pressure to the government to make changes to the legislation as well.

Conclusions

Although the title of the discussion paper suggests that the intention is to extend consumer access, the detail of the paper suggests that the FCA is also considering additional restrictions for some types of investment. The emphasis is not only on extending access but on ensuring that consumers can only access those investments that suit their circumstances.

Nevertheless, the fact that the FCA has published this as a discussion paper (rather than consulting on specific proposals) suggests that it is genuinely open to comments from consumers and the industry.

The FCA is in the process of making wider changes to the rules regarding consumers and investments (see also our notes on our client categorisation note and CCI note). It is, in effect, reconsidering its position across all aspects of the rules and considering whether those rules continue to be appropriate. Although the FCA’s direction of travel is apparent from the discussion paper, this is a rare opportunity for firms to try and address any particular concerns they have about the current rules and to have those concerns addressed as part of the FCA’s wider review.

The FCA is seeking input by 6 March 2026. There is no set timeframe for any subsequent changes.

Authored by Dominic Hill.