FCA plans review of high-risk promotions and investment access tests

The Financial Conduct Authority will review its financial-promotion rules for high-risk investments and how trading platforms assess whether customers understand complex products. Its 16 October feedback statement, FS26/3, places two central parts of the retail acquisition and account journey on the next policy agenda.[1]

A key question is whether investments with similar risks receive consistent treatment. Respondents to the preceding discussion highlighted differences between contracts for difference and leveraged exchange-traded products. The statement notes the specific leverage and negative-balance protections applying to CFDs, while products offering leveraged exposure through a different structure can fall under different requirements.[2]

Appropriateness assessments raise a separate practical issue. Feedback questioned whether standard questionnaires reliably establish understanding when answers can be found online or obtained through AI. Firms also described inconsistent interpretations of which products count as non-complex. The FCA still regards assessment as an important protection when customers access complex or high-risk investments without advice.[2]

Three strands with different next steps

The high-risk promotion review will consider consistency across products. Separately, the FCA plans an early-2027 consultation on risk-information rules and guidance for mainstream investments. Its work on appropriateness will examine the present model and possible alternatives, with stakeholder engagement planned during 2027. These are announced reviews and consultation plans, rather than new rules already in force.[1]

The current Handbook continues to require relevant firms to obtain information about a client's knowledge and experience and assess whether the client understands the risks of the service or product. Depending on the circumstances, that information covers familiarity with products, previous transactions and relevant education or occupation. Firms should not encourage customers to withhold information needed for the assessment.[3]

That existing obligation makes the design question more substantial than whether a customer can complete a quiz. For a broker reviewing its process, the useful evidence concerns what the answers reveal about understanding and how the assessment relates to the particular product's risks. The forthcoming engagement offers a route to test alternatives against that purpose.[2][3]

The programme's sequence gives firms distinct opportunities to contribute evidence on promotions, risk communication and product access. The FCA says it will prioritise changes rather than take every potential reform forward at once, while retaining protections for higher-risk investments.[1]

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