The End of the Annual Review: What CP26/10 Means for Ongoing Advice Fees

For most UK advice firms, the annual review is not a regulatory obligation. It is the business model.

It is the thing the ongoing fee is attached to, the reason a client stays on the books, and, when the firm is sold, the reason a multiple is applied to recurring revenue rather than to profit alone. Remove the requirement and you have not removed a compliance task. You have removed the load-bearing wall.

That is what CP26/10 proposes to do. The consultation closed on 22 May 2026 and the policy statement is expected before the year is out, which makes this autumn the last quiet period before firms find out.

What CP26/10 Actually Proposes

The paper, published on 25 March 2026, is titled Simplifying the pensions and investment advice rules. Most of the commentary has focused on the suitability half. The ongoing advice half is the one with commercial consequences.

On suitability and advice delivery:

• Consolidating the suitability requirements currently split between COBS 9 and COBS 9A into a single set of rules
• Replacing the “necessary information” standard with a “sufficient information” expectation
• Clarifying that a knowledge and experience assessment is not always required where the product’s target market includes novice investors
• Introducing a single “attitude to risk” concept without mandating a particular questionnaire
• Streamlining the timing and content requirements for suitability reports
• Bringing the proportionality principles from FG17/8 into the Handbook itself

On ongoing advice services:

• Replacing the annual suitability review with periodic reviews at a frequency driven by client need
• Clarifying how firms should support disengaged clients under the Consumer Duty
• Addressing legacy trail commission arrangements where they cause consumer harm

Read the second list again. Every item touches revenue.

Why the Annual Review Became the Product

The annual suitability review requirement did something the industry has quietly benefited from for a decade: it gave the ongoing fee an obvious deliverable.

A client paying 0.75% a year on a GBP 800,000 portfolio is paying GBP 6,000. Asked what they get for it, most firms reach first for the annual review. The meeting, the updated cash flow model, the rebalancing conversation, the suitability letter. It is tangible, it is dated, and it happens.

Remove the requirement to do it annually and the question changes shape. The firm is no longer asked “did you do the review”, it is asked “what is the ongoing service, why is that the right frequency for this client, and does the fee represent fair value for it”. That is a Consumer Duty question the FCA has been asking since 2023, and the annual review has been absorbing most of the pressure.

This connects directly to the work firms should already be doing on Consumer Duty, and it is the point where the two regimes meet.

The Three Client Segments This Splits

In practice most advice firms have three groups on the ongoing fee, and CP26/10 affects each differently.

Segment	Typical ongoing need	Effect of a needs-based cadence
Complex, active clients	Multiple touchpoints a year, planning events, tax year work	Little change; if anything the rules catch up with what the firm already does
Stable, straightforward clients	One meeting a year, portfolio broadly unchanged	Cadence may fall below annual, and the fee becomes harder to defend at the current level
Disengaged clients	No contact, no response, fee still collected	The hardest group, and the one the FCA has explicitly flagged

The middle group is where the commercial exposure sits. It is usually the largest by headcount, it is profitable precisely because it needs little, and its fee has been justified by an annual meeting that may no longer be required.

The third group is the compliance exposure. A client who has not engaged for two years, whose fee is still being taken, is a problem under the Duty today. CP26/10 asks firms to be explicit about what happens to them.

What This Does to Enterprise Value

Advice firms are bought on recurring revenue. That is the whole basis of the consolidation market, and it is why a firm with GBP 2m of ongoing fees trades on a different footing from one with GBP 2m of one-off planning income.

If the regulatory anchor under that recurring revenue loosens, acquirers will look harder at what the ongoing service actually is. The questions in due diligence shift from “how much recurring revenue” to “how much of it is attached to a service the client values, at a cadence the firm can justify, with engaged clients on the other end”.

Firms preparing for sale or succession should treat this as part of the same exercise. Our pieces on building enterprise value in your advice practice and adviser succession planning both assume durable recurring revenue. This consultation is the thing most likely to test that assumption.

The Other Half of the Pincer

CP26/10 does not exist in isolation. It is the second half of the FCA’s advice guidance boundary programme.

The first half arrived on 6 April 2026, when targeted support went live under PS25/22. Firms have been able to apply for the permission since 2 March 2026. Targeted support lets an authorised firm make ready-made suggestions to groups of consumers sharing similar needs, without the individualised suitability assessment that full advice requires.

Put the two together and the direction is clear. The regulator is making it easier to serve mass-market clients without full advice, and simultaneously making full advice cheaper to deliver. Both moves compress the space in which a traditional ongoing advice proposition looks obviously worth its fee.

For HNW-focused firms the immediate threat is limited, because targeted support cannot address complex planning. The medium-term effect is on the funnel: clients who would previously have graduated into full advice may be retained for longer by providers offering targeted support. We covered that dynamic in the advice guidance boundary review.

What to Do This Quarter

The policy statement is expected before the end of 2026. Four things are worth doing before it lands, all of which are useful regardless of the final rules.

1. Write down the ongoing service. Not the marketing description. The actual list of what the firm does for an ongoing client in a year, including the things nobody counts: the unprompted call after a market fall, the trustee query, the mortgage introduction. Most firms deliver considerably more than the review and have never articulated it.
2. Segment by need, not by asset value. A needs-based cadence requires a defensible basis for the cadence. Portfolio size is a proxy for fee, not for need. Complexity, life stage and planning activity are better ones.
3. Deal with the disengaged. Identify every client who has not engaged for over twelve months. Decide, per client, whether to re-engage, move to a lower service tier, or cease the fee. This is the group most likely to generate a redress conversation.
4. Test the fee against the service, at each tier. The Consumer Duty fair value assessment should already do this. If the assessment leans on the annual review to carry the value case, rewrite it now.

The firms most exposed are the ones whose ongoing proposition is a meeting and a rebalance. The firms least exposed are the ones already delivering more than they can easily describe. The work in between is description, not redesign.

The Honest Read

None of this is a threat to good advice firms. A firm delivering genuine ongoing planning to engaged clients will find a needs-based cadence liberating, because it stops forcing a review on a client who does not need one and allows three touchpoints for a client who does.

The firms with a problem are the ones where the annual review was doing the work of justifying a fee for a service that is otherwise thin. Those firms have had since 2023 to fix it under the Duty. CP26/10 is the point at which the convenient answer stops being available.

There is roughly a quarter left to sort it out before the rules arrive, and it is the last quarter in which doing so looks like strategy rather than reaction.