Background
The FCA explains that the report focuses on discretionary portfolio management and shares data and insights to help firms understand the market, compare their approach, and raise standards.
The FCA’s findings are based on survey data from around 400 wealth management firms, supported by regulatory returns and other FCA and public data sources.
Summary
The report highlights the following:
- Portfolio overview: The retail client market for discretionary management has become more concentrated. The ten largest firms by assets under management have remained broadly stable, but smaller specialist firms continue to play a role providing tailored and valuable services to their clients. The FCA highlighted that it considers that consolidation can support efficiency and growth by helping firms pool resources, expertise, and technology; however, it has also seen that if fast growth of these businesses is not managed effectively, it may create poor outcomes. As firms grow, governance, oversight and controls need to keep pace, so clients receive consistent outcomes.
- Digital transformation and innovation: Mass-market firms are often focused on digital communication channels to reach their audiences so may offer little or no person-to-person support or advice. The FCA emphasises that technology and AI can help firms improve service, strengthen controls, and reach consumers who may not currently get enough support and so firms must use these tools responsibly and understand the risks.
- Financial crime: The FCA explains that firms are a vital line of defence and so it expects them to be set up to combat financial crime, with controls that work in practice and keep pace as technology and client channels change. In addition, firms need effective monitoring and a simple process for raising concerns, so suspicious activity is identified and investigated.
- Improving outcomes on vulnerability and fair value: Client needs can change over time, so firms should not treat vulnerability as a one-off assessment, and this will become more important as firms grow and adopt more complex models. The FCA also sets out that firms are taking steps to assess fair value, including whether the price a client pays is reasonable relative to the benefits of the product or service they receive but that outcomes remain mixed and so this is an important area for improvement as firms grow and serve a wider range of clients.
- Diversity and talent: Finally, the FCA explains that women make up around 16–17% of investment manager roles, although representation differs by age category. However, its 2025 adviser survey found that 60% of client relationships include a woman. As a result, addressing the underrepresentation of women would better serve the population and increase the resilience of the sector.
Next steps
The FCA wants a competitive, innovative and resilient wealth market that supports sustainable growth and consistently delivers good client outcomes. That means firms need to understand the FCA’s expectations clearly, use technology responsibly, maintain strong financial crime controls and make sure their governance and oversight keep pace as they grow.
The FCA will not repeat the survey this year but will aim to issue a shorter version in 2027 focused on portfolio management activity.