Reacting to the FCA's 2026 Annual Public Meeting

Episode transcript

Amelia: Hi, I'm Amelia.

Paul: I'm Paul.

Russ: Russ.

Amelia: And this is Fin the Week. Welcome back everyone, a brand new episode. How are we doing?

Paul: Good, thank you.

Russ: Yeah, good. It's a bit chillier here today. It's already getting a bit colder.

Paul: Yeah, well into autumn now. Conker season – get out and find all the conkers.

Amelia: Yes, absolutely. Big jackets out this week, I think. And you've had a busy week, apart from a big birthday, Paul. We should say happy birthday.

Paul: Thank you. Yeah, I'm into the 40s now, so it gets real.

Amelia: Life begins.

Russ: Welcome to the club. It does, it does.

Amelia: Well, Paul can let us know, can't he? But you've had a busy week not just because of that, because you both attended the FCA's annual public meeting. So how was that?

Paul: It was the first time I've ever watched it live, and a bit of an eye-opener, I'd say, with a fair amount of drama throughout the session. You probably got the same vibe.

Russ: Yeah, I think so. It was actually quite sobering to listen to the personal accounts which were delivered to the board, or the executive board. Just people's life stories of how they've been impacted by what they claim to be poor support from the FCA and other providers, compensation providers. But also just the kind of trauma that poor financial services have caused them, through scams, through misleading products, through not having the associated risk highlighted.

It was quite sobering to hear the accounts. I mean, these things have happened, but you hope that people do get compensation when things go wrong. To hear first-hand accounts where they're losing their house and having therapy off the back of criminals scaring them out of money was quite an eye-opener.

I was actually a little bit surprised by the format and the way it was facilitated, because they have a statutory obligation to answer any questions. So they have an obligation to hold an open forum like this with the public where they have to answer questions. People could ask them anything and they had to answer. I wouldn't say it was awkward, because they had an answer for everything, but they were definitely put under intense scrutiny, and I thought they handled it really well. It was a bit of a lesson in composure from them, given some of the questions asked.

Paul: Yeah, it did hammer home the human element that sits behind everything in the industry. The idea of regulation really comes down to the human impact – not just the financial strain that some people go through, but the emotional strain as well. A lot of the people who were able to ask questions almost used it as an opportunity to deliver a bit of a monologue. I don't know whether that's normal for previous years of this meeting. I'd imagine it probably is, to an extent. So yeah, it was interesting.

Amelia: It's interesting to get that human element, because it's an industry that you can imagine is a lot about numbers and facts and figures. So to actually see the human beings on the end of some of these services sounds like a really important thing. And this is an annual event, right?

Paul: Yeah, an annual event. And interestingly, this was the first annual public meeting hosted outside of London – it was hosted in Edinburgh. According to the numbers, it was attended by over 900 people, between the online audience, which we were part of, and the audience actually in the auditorium. It was a two-hour session that, as Russ says, offered people the chance to pose any question they liked to the panel, and they have an obligation to answer. Whilst they attempted to answer a lot of it there, they also took other things away with them with a commitment to follow up with written answers afterwards. That's also part of the process.

It's probably worth mentioning as well that, as a show, we're focused on technology and marketing. That's our lane and we try to stay in it. But it's worth mentioning the big story of the day, which is what the media will be covering from this event. They were really focused on the topic of whistleblowers, and in particular the death of a whistleblower who had dealt with the UK and US authorities. There was a lot of scrutiny around how the FCA handles and works with whistleblowers, and the potential harm those people can come to. It's not an area we're experts in in any way, so we won't really comment on it, but it's definitely worth mentioning. The session had periods of intense questioning. There were calls from one person for Ashley Alder, the chair, to answer whether he would resign over this.

Amelia: And what was his response to that?

Paul: He was quite guarded, I would say. I can understand why he wouldn't give a yes or no answer to a question like that in a forum like that. But he certainly didn't say he would resign. He tried to move the event on in the interests of keeping momentum. I dare say they will follow up with further information. But it was a big topic because, as the panel mentioned, they receive somewhere in the region of 1,300 reports a year from whistleblowers, and 42% of those lead to direct action. People scrutinised how they support whistleblowers and whether they come to harm. There was a long read-out of a statement by an MP, John McDonnell, regarding his views on the whistleblower in question who had passed away. So that was a big focus, and that's what you'll probably read the headlines about. I don't know what you thought, Russ. It was quite tense, wasn't it?

Russ: Yeah, it was. They had to be a little bit political in their replies, I think, because they were probably quite careful about what they were responding with. On the whistleblower point, they kept coming back to the fact that there's going to be an independent review of whistleblowing specifically, led by a new non-exec board member, Leah Patterson, and they would be presenting those findings publicly. They kept reiterating how seriously they were taking this and how seriously they take their role.

It must have been difficult to face that criticism from people impacted by what had happened – friends or associates of the person who had passed away were speaking directly to them about what had happened and what they're going to do about it. They also directly addressed poor responses that those people might have received.

On the whole, I thought they handled it really well. They were never going to be able to deal with all of that during the meeting – time came into play as well – and I think they did a good job of moving along to the next question. At one point, and I don't know if this was tactical or not, they started taking two or three questions at once and then responding to them in sequence. That's quite a good tactic, because otherwise if they respond to the first question and get feedback from the person asking it, that starts a dialogue with that person, and that was happening quite a bit.

Amelia: It was only two hours, you said. That's not that long, is it, to cover all these subjects?

Russ: No, it actually went pretty quickly, I thought. It impacts everyone's lives. Paul, you've mentioned "your money or your life" as where financial services fits in. First-hand, you read articles about how people have been impacted and how it's affected their lives, but that was one of the only opportunities I've had – and it's the first one I've attended – to actually hear people giving those personal accounts of how poor financial services, criminals working within firms and other scams have really impacted their lives. And also to get that level of insight into whistleblowers. There were people who stood up and said, "I am a whistleblower and I've done this twice." It felt like quite a rare opportunity to hear those personal accounts and how the FCA would respond.

Amelia: So quite a heavy start to the conversation. But we are going to move on to some of the other things that were covered, starting with our favourite subject, and that is AI. What was said about AI?

Paul: The main takeaways were that the FCA will be releasing a new paper on what they call good and poor practice relating to AI adoption within the next week or so, which could be imminent. I haven't checked this morning to see whether it's come out, but it could be that soon. And then apparently there will also be a separate Consumer Duty-specific set of AI good and poor practice examples later this year. Again, that's going to be quite soon, because we haven't got that much of this year remaining. I know Consumer Duty is a subject you keep your ear to the ground on, Russ, so that'll be an interesting one to look out for, won't it?

Russ: Yeah, for sure. It's interesting for them to say they're going to be monitoring quite closely how the Consumer Duty framework holds up with all this AI usage, because it hasn't really been tested in terms of, let's say, AI-generated adverts, or consumers accessing services through AI tools like ChatGPT and Claude. They said they're aware there's a lot of work to be done in that area. For them, and I guess for everyone, it's relatively new. Can the Consumer Duty framework and its outcomes be easily applied to all of the innovation going on around it with AI? And like you said, Paul, I also noted that they're going to be releasing these good and poor practice examples, specifically around AI, later in the year, so I'll be keeping an eye out for that.

Amelia: What was said about LLMs? Because we've touched on this in earlier episodes, haven't we – people taking financial advice from AI. What was the discussion around that?

Paul: I found this really interesting, because the FCA were quite explicit on the point that consumer use of general-purpose large language models – things like ChatGPT, Claude, Gemini, whatever – is "outside of the perimeter", as they put it. That's basically them saying they don't regulate that. I guess they can't regulate that. And they said FCA research shows consumers understand they're unprotected if they take financial advice from an LLM.

Amelia: Do they, though? Do you think that's true?

Paul: No. I was going to say it was a bit of a cop-out. I don't know if that's too strong a way to put it, but it feels like they just don't know how to regulate it, so they're drawing a line in the sand and saying this is outside of our scope – it's basically the Wild West – but don't worry, we think people understand that. I'm not so sure that people do understand that. And even if people do understand it, they probably still like what they get from LLMs, so they'll probably trick themselves into thinking it's all fine.

Russ: Yeah, absolutely. I'd actually forgotten about that point until you mentioned it, because it felt like it was said and then quickly forgotten. I think you're absolutely right. If someone is looking for financial advice, they'll take the citation they receive from that website in the LLM as what it is. Say it was a risky investment or something – you'd type in what the investment was about, and the LLM would probably do a good job of grading that investment and giving you some advice on what may or may not happen, the risks associated with it. I'm pretty sure people would believe that was something they could act upon. But what they're saying is that there's no regulation in that area, so if you act upon it, the Consumer Duty framework they have for consumer protection doesn't cover the advice you're getting from an LLM. I'm not sure people are really aware of that.

Amelia: So it's basically saying that if there's no regulation there, it falls to the consumer. But how does the consumer know that? If someone was just going there to get some financial advice – I don't know. It's a tricky one, isn't it?

Paul: Yeah. And another interesting angle that just occurred to me – something else they said in another part of the conversation was that firms remain accountable for any technology they deploy, whether it's AI or otherwise. They're basically saying if you bring a piece of technology into your firm and use it to deliver a service, that's your problem. You can't outsource the problem to the person you bought it from. If you think of that in the context of what we've just been talking about with LLMs, that probably applies if a firm is using a large language model to supplement the service it's delivering. It's a bit of a grey area. If you've built your own guidance tool that sits in a portal on your system and can answer a customer's queries, and that's driven by Claude, for instance, in the background, they're saying whatever that says is your problem, not Claude's.

Russ: And what about robo-advisers? Are they not able to lean on this technology to provide ideas for people's investment portfolios? One of the things I've found AI best for is crunching large data sets and analysing them. So are they saying that any firm using any form of AI to give advice to their consumers sits outside of regulation?

Paul: Another interesting point I read into afterwards was something they mentioned called the targeted support regime. It's a new thing the FCA have brought in, live since April 2026, designed to help close the UK's "advice gap", as they call it. It essentially bridges the gap between generic information – content that answers the question "what is an ISA?" – and proper professional advice, meaning personalised, one-to-one financial advice. It exists between those two extremes. Firms must apply for and hold a specific FCA targeted support permission, but once they have it, they can provide – advice isn't the right word – guidance to customers that's targeted at a segment of customers rather than an individual. So they could say, "people with your level of savings would typically benefit from doing this." They're giving advice, but it's heavily caveated and generalised. It's not one-to-one advice.

I thought that was really interesting, because that sounds to me like a very reasonable and smart thing to allow companies to do. But in the context of the world we live in now, where you have access to AI and you're going to be asking your AI tools for this sort of information as well, they're basically saying, "we've got this set of firms who have special permission to give targeted advice, but then there's this Wild West of AI out there which anyone can access anyway." One cancels out the other, to me. What's the point? You need to tackle the big problem, which is the tool that everyone's starting to use.

Russ: I think it's going to be the next big area of regulation, and perhaps they didn't want to say too much about it at the moment apart from admitting they're not really on top of it – which, reading between the lines, was what they were saying. It's changing so fast. It must be difficult to introduce regulation around such a fast-moving technology. I think over the next 12 months we'll see. They've already alluded to this good and poor practice being released before the end of the year, which, as you said, Paul, with holidays in the mix towards the end of the year, is going to have to be released in the next eight to ten weeks. That's quite soon. Then we'll probably see some feedback on that. And at the next public meeting, which I'm already looking forward to—

Amelia: I might come.

Russ: —I think there has to be a bigger focus on AI and what they're doing.

Amelia: It'll be interesting to see what happens there. Let's move on to our next topic, and that is the lead gen crackdown. What's this about?

Paul: This was effectively about a joint task force that brings together the FCA, the ICO – the Information Commissioner's Office – and the ASA, the Advertising Standards Authority. They're looking into claims marketing. The obvious example right now is the car finance scandal, I suppose you'd call it, where you see those adverts and get contacted by people saying, "Did you purchase a car between these dates? Did you get it on finance? You might be due money back."

They're looking into people abusing that system. I'm not too clued up on it, but I think the way it works is that there are companies out there who will basically farm the world – send out these messages to people in the hope of building up a database of people who might have claims – and then sell that database on to a firm, like a legal firm, who can process those claims, and everybody makes money from it. The ICO executed a court-approved search warrant on lead generators a few weeks ago. There was a stat about this: before they did that, there were up to 100,000 complaints a week about spam claims marketing, and after the devices were seized, it went down to 2,000 a week. So the complaints relating to this practice dropped dramatically.

The FCA is concerned about significant misconduct when it comes to what they call lead generation. What they're basically saying is that it's no defence if you're a firm that has purchased these claims leads from a third party. You can't claim ignorance of how they were gathered – it's on you as well. It was an interesting point that stood out, in that they're tackling these scenarios that bubble up from time to time, where something like the car finance claim bubbles up in society, people become aware of it, and it's prone to bad actors trying to get as much data as they can. I don't know, Russ, if you had any notes on that section. It was a kind of passing point.

Russ: Nothing more than what you said there. It was a bit surprising just to hear the level of complaints. One thing that resonated with me throughout the meeting was how closely the FCA and other financial regulators work with enforcement – not enforcement internally, but these actually being crimes. There was one account where the offender received something like six years behind bars for what they did. So they must be working quite closely. I don't know what happened with the devices that were seized, but it was interesting to hear the relationship they have with the police and enforcement on that side of things, and also with Parliament. It was interesting to hear where the FCA fits in the middle. But I don't know what action was taken after it was discovered that these devices were part of the cause.

Paul: Yeah. I think they're basically saying that if you're buying leads or working with affiliates or introducers and the like, the provenance of your data needs to be solid and you need to know where it came from, because they've uncovered what they called "complex offshore chains in private credit" funding these processes. So it's something to watch.

Amelia: And you touched on data there. What was said about data gathering? Because we talked about cookies last week, didn't we?

Paul: Last week, yeah. Another interesting theme was the data gathering processes that the FCA is using. One quote from Jessica Rusu, who's the Chief Data, Information and Intelligence Officer, was: "We're also looking at bringing in other data sources to reduce the reliance we have on firms." That basically boils down to them asking for information less and observing more. They're using whatever sources they can to gather observational data on the state of the industry, rather than relying purely on self-reporting and things like that.

It's interesting because I noted down that it's the theme of signal loss that we're talking about this quarter – how it's becoming harder and harder to gather data and provide evidence. This kind of turns that on its head. It's saying that the people waiting to receive the evidence are also working the other way around and pulling from data sources where they can. It's an interesting balance, because from what we can see, gathering that data is hard and getting harder. So that was another theme that ran through the event, I thought.

Amelia: And now let's talk Consumer Duty. I know we mentioned this earlier on. We are three years on, and we've discussed it at length, but what was said at the meeting?

Russ: Aside from going through the framework again, it comes back to those personal accounts people gave of the trauma it's caused in their lives, just being misled with products. In terms of what the FCA actually said, it's forming part of their regulation now. Specifically, they said it's the basis for their consumer protection regulation. They're using Consumer Duty and the framework to roll out things like – I think this year – regulating the buy-now-pay-later schemes. Big brands such as Klarna are now being regulated as part of that. Help and guidance about making investments as well – that definitely seems like an area where people would be misled. I think that's where consumer understanding comes in as an outcome, which is often something that isn't clear, so they provided some guidance around that.

I thought it was quite interesting to hear about a market study they'd done to lower the cost of premium finance in insurance. I think that resulted in a saving of £157 million back to consumers who pay monthly for insurance. So they're actively doing these. With one of the outcomes being price and value, they're now actively doing fair value assessments and getting firms to reduce prices. It was good to hear how the Consumer Duty is working and actually having a positive impact on people's lives. They also ran a survey which showed that 88% of firms understand their expectations.

Amelia: Were you surprised by that?

Russ: I thought that was quite high, yeah. But we are three years in. Firms need to proactively look at their processes and prevent foreseeable harm. The way they can do that from a digital perspective is going through their journeys, making sure risks are clearly identified, making sure the language is easy to understand, and making sure support is there for consumers when they need it – especially consumers in vulnerable circumstances, who may find it difficult to complete forms if they're in distress. They need to go through this proactively and provide evidence. They didn't specifically give those examples, but we are aware of that. They have 11 active enforcement investigations, which there are some details about – I think we've discussed a couple of those before – and they're also looking at 33 skilled persons reviews. So it was good to hear where they're at right now with it all.

They also discussed AI and, like we said, they're going to be publishing some good and poor practice, which is going to be really interesting – to see what they're talking about, and whether they even talk about LLMs in line with Consumer Duty, or at least their stance on LLMs, in that publication.

What was also interesting was to hear accounts of vulnerable customers and some statistics around that. The FCA have conducted a Financial Lives survey, and that showed that one in ten adults in the UK have no cash savings at all, and one in five have less than a thousand pounds. So you're talking about 20% of the population having less than a thousand pounds. When you think about scam adverts, loans and high-risk investments, there's a huge proportion of people who are going to be caught up in that in terms of being vulnerable and prone to acting on misleading scams, because they have very little savings. They did talk about some work supporting workplace saving schemes and helping people build resilience and build up savings, so they are acting on that. But a large proportion of people – and this is where Consumer Duty comes in – fair pricing, consumer support, that transparency is really important for everybody, especially vulnerable customers.

It was really interesting to hear them talk about power of attorney. It's not something I'd given a huge amount of thought to before. I've never been in a family situation or a carer situation where I've had to think about it. But from a vulnerable customer perspective, people have power of attorney when they're looking after family members or friends and undertaking things on their behalf, and they were talking about how that is often abused. It'd be interesting to look into that in more detail. There are some difficult issues around banking, insurance and payments where someone with power of attorney is perhaps abusing that power. Which also comes back to Consumer Duty, but it's an angle I hadn't really thought about before, because the person with the power of attorney is acting on behalf of the consumer.

I think they said they were engaging with the Treasury on modernising payments legislation to help people in those circumstances. There are things like sharing PIN numbers that people with this power shouldn't do. So it's a really interesting area, an interesting topic, and I'll be looking at it in more detail, because it's the kind of persona within the Consumer Duty regulation that I hadn't considered in enough detail. I've obviously discussed quite a few things there, but I thought it was quite enlightening to hear what the main topics are.

Amelia: Is there anything else you took specifically from the Consumer Duty discussion, Paul?

Paul: On the power of attorney thing, they mentioned that one of the challenges is that it can be abused. But the main thing I took from it was that actually the problem is that banks, and other parts of the financial services industry, aren't on the face of it doing a very good job of interfacing with people who are using the power of attorney system. For example, if you're legitimately trying to do something on behalf of somebody and you have lasting power of attorney, there are roadblocks that mean you can't actually achieve what you need to achieve. That stood out to me as a really interesting UX challenge, because it's almost like the system is set up to expect to be abused and is therefore too heavily locked down, when in actual fact there's a lot of legitimate need for it. It's why it exists. And it doesn't sound like the industry is doing a particularly good job of working for those people.

This is purely my own speculation, but with all the news we hear about an ageing population, I imagine this will only grow as a challenge, because more and more people will be relying on power of attorney and will need to transact on behalf of family members. The example they gave, which you mentioned, Russ, was that because people can't achieve what they need to, they're resorting to dangerous things like sharing PIN numbers – which they were quite clear on: don't do that, that's not the right way to do it. If you've got power of attorney, your bank should facilitate you doing whatever it is you need to do. So I thought that's probably a hot topic, and maybe warrants a separate deep dive. How does a bank actually work with people who have power of attorney? That'd be a really interesting area to dig into.

Russ: It's also quite relevant to how poorly accessible a lot of these digital experiences are, which we keep finding. If someone can't make a payment with a screen reader, for example, then someone might have to act on their behalf to do that. Would they need power of attorney if the digital journey was usable for them? Would they need someone with lasting power of attorney acting on their behalf? I think it raises a really interesting conversation, and maybe that would be a future podcast.

Amelia: I feel like it's a really interesting conversation as well, because so often in those situations they can be emergency situations, can't they? People's circumstances can change due to sickness or whatever it is, and then people panic because they want, or need, to be able to access their money for whatever reason. Really interesting topic. We've covered loads – lots of discussion there. Is there anything else worth mentioning, do you think?

Paul: There was one quote I picked out from the CEO, Nikhil Rathi, who said in relation to Consumer Duty: "We will need the help of everyone in the room to keep being imaginative around how we really test the outcomes that consumers are receiving." I just thought that was interesting, because it was a bit of an indication that Consumer Duty remains experimental, in a way. It's an outcomes-led piece of regulation, and I don't think they have an agreed-upon, strict structure for assessing how well it's going. I think they're saying, "help us figure this out as well." Evidence gathering is such a key thing, and it plays nicely into the work we're doing on UX Duty, as it happens. But it's a constantly moving target, isn't it?

Russ: Yeah. It's like, "we can do what we can, but it's up to the firms to provide us with that evidence." Proactively find what might be causing foreseeable harm to your customers or prospective customers and present that back to us. The responsibility isn't just on them to regulate it – it's about people coming forward with evidence and showing what they're doing as well. And they were asking for help on that side of things.

Paul: Yeah. I reckon there are probably also really interesting barometers they can use, and probably are using. I always think back to the example of Google Trends – people have used it in the past to predict where there's a flu outbreak, because you can look at people Googling things like how to treat certain symptoms. You can see the trend going up in particular geographies and say, "okay, there's a flu outbreak there," and it's pretty accurate. I'd imagine you could do the same thing with financial harm, mis-sold products and systems that aren't working particularly well. You could probably say, "that's a strange increase in people searching around issues with a pension," and that might flag to the FCA that something's going wrong.

Russ: Or a certain bond or something like that. How would you use that? With Search Console you need ownership of the domain – is that only relevant to the domain, or can you broaden it?

Paul: No, this would be Google Trends, which is global. You can put anything into Google Trends and it will show you how popular that thing is versus how popular it has been in the past. If you were to put in something that's happening right now – I don't know, Cristiano Ronaldo, who's just been moaning about the national team – you'd probably find he's as popular as he's ever been in search.

Russ: Or Messi's retired, I've heard. Are we going to spin off into football banter now? But yeah – and with being able to pull this data easily into dashboards now with AI, surely those condensed search terms could be flagged and raised within the FCA as something to investigate.

Paul: Yeah. A good example would be if you saw a sudden spike over time in people searching for "how do I find lost pensions?" With workplace pensions being introduced – I can't remember exactly when it was now, but a fair few years ago – you've probably seen a ramping up in people searching online for how to find pensions, how to find lost pensions, how many pensions do I have. That's a really good indicator of how well the industry is doing at helping people consolidate pensions.

Amelia: Well, another super interesting conversation, and as always it gives us lots of ideas about the conversations we can have in future episodes. And it sounds like you're already looking forward to next year's meeting, guys. So, before we go, should we play some Jargon Busters?

Paul: Yeah, let's do it. We don't have Pat here today to provide his dictionary-level definitions.

Amelia: He's had a lot to say recently, hasn't he?

Russ: Yeah, he's been smashing it recently, so I'm a little bit worried.

Amelia: So, just in case you've never caught this before, I have a list of industry terms, and every week I put the guys to the test to see if they know what they really mean. The term this week – I hope I'm going to say this right, I did have to look it up – is... fee-doo-chairy duty. Fidu—

Paul: Fiduciary duty.

Russ: Fiduciary.

Amelia: Fiduciary duty, yeah. I looked it up and I still messed it up.

Paul: Russ, do you want to start, or should I go?

Russ: God. Fiduciary. Is this about the authority that a fiduciary has within a firm and what kind of activity they can do? Doesn't it organise lots of different things in terms of how structures are set up and how money is managed? Is it the kind of regulatory oversight you'd see within that? That's my response.

Amelia: What do you think, Paul?

Paul: Fiduciary is a big word, particularly in offshore jurisdictions and the like. I don't have the proper definition, but in my head it describes a relationship where a firm has a duty to oversee a person's personal effects, their investments and their portfolio, and it's their duty to administer that and look after it. They've got certain rules about how they govern things.

Amelia: You're definitely both on the right lines. Put more simply, it's a legal obligation to act solely in the best interest of another party. I feel like you both basically said that, but in a more elaborate way. So that is fiduciary duty. Well done. See, we don't need Pat.

Paul: You've probably described it more simply, I think.

Russ: Yeah, Pat would perhaps have explained it better, but I'm glad we're on the right track – that it was finance and structure and obligations. I think we got there.

Amelia: Absolutely. Good work. And of course we will have more Jargon Busters next week, and a brand new episode. We'll be back next Friday. Thanks for listening, and have a great weekend.

Paul: Cheers.

Russ: Thanks, see you.