The FCA sets out that it had previously published a consultation in November 2023 on proposals to require personal investment firms (PIFs) to be more prudent and set aside capital for potential redress liabilities at an early stage and a discussion chapter to look at broader improvements to the prudential regime for PIFs.
The FCA has now explained that due to various wider regulatory changes impacting the advice market, it has realigned its regulatory priorities and has decided not to take the CDR proposals forward.
The FCA makes clear, however, that it expects firms to consider consumer outcomes and address redress liabilities in line with its rules, including the Consumer Duty, and that it expects firms to consider and follow its update from January 2025 in relation to redress liabilities.