The FCA has written to CEOs of financial advice firms following the publication of its retirement income advice thematic review

The letter from the FCA's Director for Consumer Investments states that the review found some firms showed they had considered their customers’ needs and had designed their advice model in a way likely to lead to good outcomes. However, the review also found that some firms may not be meeting the needs of their customers, potentially leading to poor outcomes. 

Areas for improvement

The letter picks out some key areas for improvement identified by the review, including:

  • applying an approach to determining income withdrawals without taking account of individual circumstances, or based on methods and assumptions that are not justified or recorded;
  • risk profiling not being evidenced, being inconsistent with objectives and customer knowledge and experience, or lacking consideration of capacity for loss;
  • failing to get necessary information about customers to demonstrate advice suitability or not exploring future objectives or circumstances;
  • periodic reviews of suitability not always being delivered to customers that have paid for ongoing advice; and
  • holding inaccurate or insufficient records as the control framework to enable customer outcomes to be assessed and to track whether periodic review services were delivered.


The FCA asks CEOs to take steps to address the review's findings within their firms and document how they have done so. The letter also refers to:

  • the FCA's Retirement Income Advice Assessment Tool to help firms providing retirement income advice to understand the FCA's methodology; and 
  • an article it has published setting out how firms can improve the way they use cashflow modelling. 

Ongoing focus

The letter is clear that retirement income advice will remain an ongoing focus for the FCA. The review notes that decisions for consumers approaching or in retirement have become much more complex with the potential for more risk, and that advisers have a key role in this market. Specifically the FCA will be following up on the findings of the review more generally with firms involved in the retirement income advice market and carrying out further supervisory work to explore the scale of the issues identified and tackle any harms. 

While the review is primarily concerned with retirement income advice, the letter notes that the review may also be of interest to firms providing personal recommendations on investments more broadly (including the section on the Consumer Duty).