The FCA has launched a consultation about tightening the tests for elective professional status, while setting out wider measures including “targeted support” and a discussion paper on risk appetite aimed at pushing more UK savers into long-term investments.
Nick Dilworth, managing director at Retailbook, the primary market specialist for retail investors, talking about the FCA package told Global Trading: “We wholeheartedly support the FCA’s landmark package, which provides a pivotal framework for cultural change to investments in the UK. The FCA’s move towards encouraging clearer, more engaging information for retail investors is a game-changer. It replaces the old, paternalistic ‘zero-failure’ culture that historically stifled access with one based on empowered decision-making.
The Financial Conduct Authority has set out proposals to change how firms classify clients as professional or retail. This is part of a wider package to boost the UK’s investment culture.
Simon Walss executive director at the FCA said:” [Yesterday]’s measures support investment risk culture right along the spectrum.”
The consultation on client categorisation says firms would move away from the current MiFID-style tick-box tests towards a more holistic assessment of a client’s expertise, experience, knowledge, and capacity to bear loss. Wholesale brokers will have greater responsibility on to evidence that an individual genuinely meets the professional standard.
The FCA also proposes a vastly restricted opt in route allowing individuals with at least £10 million of investable assets to elect to be treated as professional. Those clients would still need to request that status and give informed consent, but firms would not have to apply the same structured qualitative test used for other elective professionals. The FCA stressed that this new threshold is deliberately high, so that only a small cohort of wealthy sophisticated individuals can easily choose to fall outside retail protections such as the consumer duty standards.
In practice, professional classification determines which products and how much leverage can be marketed and on what terms to retail clients. Professional clients can be sold more complex, higher-risk instruments that are restricted or banned to be sold to standard retail investors: highly levered contracts for difference, some non-mainstream pooled investments and certain crypto-derivatives are for example not allowed for standard retail traders.
On the retail side, the package is designed to shift some money out of cash and into investments over time.
Read more: FCA’s new consultation aims to streamline further capital raising and enhance investor access
This new package of consultation and proposals come ahead of the 19 January 2026 when the new Public Offers and Admissions to Trading Regulations (POATRs) regime comes into force in the UK. It replaces the existing UK Prospectus Regulation to facilitate a stronger retail investment culture and widen participation in UK capital markets by streamlining rules and reducing costs for companies issuing equity and debt.
Dilworth told us that: “The strong retail participation we have recently seen in IPOs for companies like Shawbrook, Princes Group, and The Beauty Tech Group confirms that the public’s appetite is there, provided they are given access and clarity. By embedding these reforms swiftly, the regulator and government can unlock the vital flow of domestic investment needed to drive the UK economy forward.”
The new FCA discussion paper, part of the package presented, aims at finding ways to expand consumer access and interest to and in investing. It asks how regulation can support stronger and smarter risk-taking. The FCA states that millions of UK adults hold investment products but also that large cash balances remain parked in low-yield accounts.
In parallel, the FCA and government are preparing a targeted-support regime and backing an industry-led campaign to explain the benefits of investing, aimed at households that do not receive full financial advice but have more than £10,000 sitting in cash
The FCA said:” We want to see a market that empowers more consumers to invest for their future with confidence, understanding the costs, risks and potential returns.”
The new British regime aims at reaching the same outcome the European commission and ESMA have highlighted for retail. They also look to have retail invest more broadly while trying to limit more leniently regulated speculative vehicles.
Read more: ESMA launches retail consultation as industry calls for reform
