Why did the FCA put the CP cart before the DP horse? – Murphy

In fact, ‘odd’ might be generous. 

Because in the space of a few weeks, we’ve had a Consultation Paper (CP25/11) that proposes removing the advice trigger for a fairly significant number of borrowers – effectively opening the door to far more execution-only business – and then a Discussion Paper (DP25/2) that asks all the right questions about the value of advice, how consumers behave, and how regulation should evolve to support better outcomes. 

Here’s the strange bit: CP25/11 closed for consultation before the industry had even seen DP25/2, let alone had a chance to respond to it. 

The CP ran for just over a month. No time to even see, or digest, no chance to feed in what might come from the DP. It was finished and filed away before the ink was dry on the broader review. And I’m left wondering: what was the rush? Did the regulator not think these two papers were somehow intertwined and relevant to each other? I certainly do. 

An unneeded alteration to advice practices?

Because if the point of this DP is to shape future regulation, then surely the logical sequence is to wait for those responses, weigh them properly, and then decide whether or not changes like those in CP25/11 make sense. Instead, the FCA looks likely to push through a technical rule change that could reshape how advice works, is accessed, and delivered in this market, without hearing the full evidence first. 

And that matters. Because DP25/2 is actually full of praise for advisers. It calls advice a “foundational pillar of mortgage regulation”. It highlights that 97% of all new mortgages since 2015 have been advised. It notes that brokers score 8.3 out of 10 for consumer satisfaction, among the highest in financial services. It even acknowledges that advisers frequently go further than the rules require to make sure the client gets the best outcome. 

That doesn’t sound like a market in need of a workaround. 

In favour of lenders

And yet that’s what CP25/11 is. A workaround. A way to give lenders a route to more direct business, fewer intermediary fees, and, we are told, less execution-only friction. But it’s been packaged up as something it’s most certainly not: a win for consumer choice, a chance to cut costs. 

Let’s be honest. The consultation offered no real detail on the value of advice. No evidence that consumers want to avoid it. No serious analysis of what’s lost when you take advice out of the process. And now it’s closed. Done and dusted before anyone had the chance to point out the inconsistencies between the CP and the DP. 

Because while CP25/11 may have closed, DP25/2 is now alive, providing a chance to push back. It gives us a way to reassert what the CP ignored: that advice works. That it protects people. That it flags risks and prompts better decisions. That it offers long-term value far beyond a single transaction. 

We’ve just spent two years working to make real the FCA’s requirement that advisers must be more holistic, more joined-up, and more focused on outcomes. That’s what Consumer Duty was about. Not ‘more sales’, but better service. Better planning. Seeing the client in the round and covering off as many of their wants and needs as possible. 

But CP25/11 casually opened the door to bypass all of that for a number of borrowers. Execution-only is not the future. It’s not what consumers want, and it’s not what the market needs. It’s a regulatory convenience being pushed through to meet a lender agenda and we all know it. 

The shame is that the DP shows the FCA does actually know the value of advice. DP25/2 proves it. Take an area like later life lending. The DP talks about ensuring all advisers have the qualifications needed to advise in this space; a move away from silos, which will allow advisers to give borrowers holistic advice. It doesn’t talk about borrowers not wanting or needing advice in this space; it actively acknowledges the benefits of advice across all product options. 

So why – in the CP – put forward a rule that undermines the very thing this DP says it wants to support? The only explanation is timing. And that should worry anyone who cares about the future of advice. Because if we’re going to be governed by consultations that skip the evidence stage and ignore the bigger conversation, then what exactly is the point of having discussion papers at all? 

There’s still time to influence where this goes next. The DP is our opportunity. But the sequencing of CP25/11 has already done damage. It’s sent the message that changes can be rushed through without the full picture, and that advisers and advice – despite all the positive noise – is still seen as expendable in the eyes of some. 

If that’s the direction we’re heading, we’ll all be worse off for it. Not just consumers, but advisers too. And the FCA should know that better than anyone.