On Monday many of us woke up to news the industry has been waiting for. What did the FCA find when it took a dive into 22 large advice firms’ ongoing advice. I, like many I suspect, opened this email with great interest.

What? Surely not! 83% of the time those reviews were ok – delivered as agreed. What a welcome boost of confidence for all those involved. I can only imagine the time and effort it took to collate all of that data, then test, verify and issue it. Well done – great result.

There is a bigger picture forming here. Let’s discuss.

No room for complacency

The FCA’s review makes one thing clear: ongoing advice isn’t just about charging fees—it’s about proving value. Some key takeaway:

Consumer Duty is definitely driving change – On fees, firms themselves need to be able to demonstrate that charging ongoing fees are 1. justified and 2. that clients are actively engaging with the service. We are currently working on a new NextWealth report to help firms navigate around advice fees and benchmarking themselves [click here to pre-register]

Segmentation is critical – We talk a lot about this at NextWealth. The review findings indicated that not all firms are clearly defining their target client profile and ensuring ongoing services are tailored to those who truly benefit from them. in particular need a clear client segmentation strategy to ensure consistency of advice.

Offboarding isn’t optional – BIG SUBJECT. If a client no longer fits the firm’s proposition or isn’t engaging when offered a review, advice firms must be prepared to cease charging for ongoing advice. The days of keeping ‘silent’ clients on recurring fees are definitely numbered.

In a NextWealth report published last month Getting Onboard with Offboarding we identified that the shift in advice firms disengaging with clients is already underway.

Half of all advice firms have offboarded clients in the last year and that number is expected to rise. More than a third of firms have identified clients that no longer fit their proposition, and nearly 11% expect to significantly increase offboarding over the next 12 months.

So, going back to the findings from the FCA review, advice firms are already taking steps to segment and/or identify clients who don’t engage (or don’t need ongoing advice).

Getting Onboard with Offboarding also found:

• Firms with a clear client segmentation strategy are twice as likely to offboard clients.
• 42% of advisers have a rough idea of their target client but haven’t formally defined it.
• Consumer Duty is cited as a major driver – many firms are reassessing whether they’re truly delivering value to all their clients

One of the FCA’s findings also pointed to the need to review its own rules: we plan to review the existing rules relating to financial advisers’ ongoing services to make sure they stay up to date and relevant. 

I suspect this relates to the now-heightened effect Consumer Duty is having on the provision of financial advice for UK consumers. In our latest NextWealth Adviser Tech Stack report, Advice at Scale, we highlight the growing concern that only 14% of the UK population with investable assets over £100k receive ongoing advice. That’s 2.7 million clients out of a possible 19.1 billion who are looking for it.

That is now. With research indicating that more advice firms will offboard clients in the future, it’s no wonder the FCA is looking at the rules. The FCA also mentions that it has been 12 years since RDR, and new business models and technologies have come to market, and consumer needs have changed.

Next up, the Advice Guidance Boundary Review. I’m intrigued to see how AGBR ties this all in with the review on ongoing fees. But for AGBR, the FCA has broken this one down. In December last year, they released a consultation on pensions targeted support. We can expect an update once they have assessed industry feedback, with detailed rules and guidance (confirmed to extend to retail investments) set for publication in mid-2025.

The FCA’s review confirms what many in the industry already suspected—ongoing advice must prove its worth, not just its cost. The days of passive, one-size-fits-all services are fading, replaced by a sharper focus on segmentation, engagement, and demonstrable value.

At NextWealth, we’ll continue to track these developments and share insights on how firms are adapting. The conversation isn’t over yet—far from it. With offboarding on the rise, Consumer Duty reshaping business models, and the Advice Guidance Boundary Review looming, there’s plenty more to unpack.

Emma Napier, Consulting Director at NextWealth