As the insurance sector moves into the new year, the team at My Virtual Compliance (MVC) wishes you the very best. You’ve navigated intense regulatory change, from bedding down the Consumer Duty to submitting your first major reports.

Now, the strategic compliance race for 2026 has already begun—and the FCA has just fired the starting pistol.

READ ALSO: Value Measures Reporting: A Strategic Guide to Keeping Your Product Portfolio Compliant

The firms that start planning in January—rather than scrambling to meet Q2 reporting deadlines—are the ones that transform compliance from a mandatory cost into a competitive, value-generating edge. This is the core of “Faster and Easier Compliance for Insurance Brokers.”

The FCA has signaled that the “grace period” for the Consumer Duty is over, specifically within Home and Travel insurance. Following the Which? super-complaint, the regulator is shifting from broad guidance to targeted enforcement.

For compliance leaders, this means your 2026 Strategic Plan must move beyond “housekeeping” and address three specific high-risk areas identified by the regulator:

• Claims Outcomes: The FCA is looking for evidence of proactive claims handling. It is no longer enough to track how many claims are settled; you must evidence that third-party handlers are meeting Duty standards and avoiding “hollowing out” of cover.
• Policy Governance: A critical review of policy wordings is required to ensure terms aren’t just legal, but clear. The focus is on removing “unintelligible” exclusions that lead to poor consumer understanding.
• The “Fair Value” Test: With the 2026 scrutiny, “Fair Value” assessments must be robust enough to stand up to a Section 166 skilled persons review. If the value isn’t demonstrable in your data, it doesn’t exist in the eyes of the FCA.

1. Securing Your Strategic 2026 Advantage

For too long, compliance has been seen as reactive—a scramble to meet the next deadline. In 2026, the FCA is moving firmly into an enforcement phase, shifting its focus from what your policies say to how your firm can prove it delivers good outcomes, particularly under the Consumer Duty and the Senior Managers & Certification Regime (SM&CR).

Your strategic advantage lies in translating anticipated regulatory shifts (like new rules around Non-Financial Misconduct or further Digital Operational Resilience expectations) into proactive business workflows now. 

A planning call allows you to lock in the compliance resources, technology investments, and training schedules needed to stay decisively ahead of the curve.

2. January is the New Q4: Proactive Design is Key

Traditionally, Q4 is dedicated to compliance housekeeping: audits, annual SM&CR certifications, and year-end reporting. While these tasks are vital, they pull focus from forward planning.

In 2026, January is the crucial month for proactive design. It’s when your firm should be:

• Benchmarking your performance against the Consumer Duty Board Report submitted at year-end.
• Integrating new regulatory requirements (like the upcoming changes to SM&CR for 2026) directly into job descriptions and Statements of Responsibilities.
• Budgeting for the specific RegTech and training that will streamline processes for the remaining three quarters.

By acting now, you move past mere maintenance and secure the bandwidth needed to innovate confidently.

3. Taming the AI Frontier: Establishing Your Verifiable Governance

Artificial Intelligence is no longer an innovation topic—it is a measurable compliance risk. As more firms adopt AI for everything from pricing models to suitability analysis, the FCA is demanding clear Accountability and Governance at the Senior Manager level.

The regulator won’t introduce new prescriptive rules for AI, but it will map existing regulations (SM&CR, Consumer Duty, SYSC) onto your AI usage.

Your 2026 plan must include establishing a Verifiable Governance Framework that can demonstrate:

• Fairness: That AI algorithms do not create bias or unfair customer outcomes.
• Explainability: That automated decisions can be justified, audited, and understood by both staff and customers.
• Accountability: That a named Senior Manager owns the risk and compliance of every adopted AI tool.

4. Stop Reacting, Start Leading: Your MVC Strategic Roadmap

Compliance in 2026 is about strategy, not spreadsheets. My Virtual Compliance delivers bespoke, tech-enabled compliance services, driven by our proprietary tools, to maintain a robust framework for your firm all year long.

We don’t just tell you what the rules are; we embed the How:

• Roadmap Generation: We develop a tailored 2026 plan that clearly prioritizes the most impactful regulatory changes (Consumer Duty enforcement, AI governance, SM&CR evolution) against your firm’s growth objectives.
• Practical Workflows: We provide the necessary systems, templates, and automated workflows to turn complex regulation into actionable, auditable daily tasks.
• Senior Support: We ensure your Senior Managers have clear, defined responsibilities and the MI (Management Information) they need to meet the FCA’s demanding standards for demonstrable oversight.

Make this your year to lead with compliance.

READ ALSO: FCA Compliance Just Got Simpler: PS25/21 Unlocks Time and Growth for Your Brokerage

Schedule Your Strategic 2026 Planning Call

Don’t wait until the New Year rush. Use the quiet period now to book a dedicated session with our experts to map out your 2026 regulatory obligations and gain that strategic head start.

Book Your 2026 Compliance Strategy Session Today.

The post 2026 Compliance Kicks Off Now: Secure Your Strategic Advantage appeared first on My Virtual Compliance.

This is the final step following the consultation paper CP25/12, and it represents a fundamental shift: the FCA is moving away from a one-size-fits-all, rigid regulatory framework towards one that is proportional, flexible, and supportive of competitiveness.

This is your chance to streamline your compliance, reallocate resources, and truly deliver on the promise of “Faster and Easier Compliance for Insurance Brokers.”

READ ALSO: Value Measures Reporting: A Strategic Guide to Keeping Your Product Portfolio Compliant

What is FCA PS25/21 and Why Does it Matter?

Published on December 9, 2025, PS25/21 sets out the finalised, optional rules that simplify various requirements across the insurance and funeral plan sectors.

The core purpose of this Policy Statement is to reduce the administrative and compliance burdens on firms while maintaining the high standards of customer protection established by the Consumer Duty. 

By offering flexibility, the FCA is empowering firms like yours to tailor your compliance efforts to the actual risk profile of your customers and products.

For commercial insurance brokers and intermediaries, the changes are centred around three pillars of simplification:

Practical Conformance: Your 3-Step Action Plan with My Virtual Compliance

The new rules are effective immediately (from December 9, 2025), but crucially, they are optional. You can maintain the status quo, but doing so means missing out on significant efficiency gains.

Here is MVC’s practical action plan for your brokerage to adopt the PS25/21 changes and leverage this flexibility:

Step 1: Document Your Client Categorisation Policy

The new definition of commercial clients aligns with the FOS eligible complainant definition (based on factors like turnover, balance sheet, and employee count). 

This means many of your larger clients may now fall outside the scope of key conduct rules like ICOBS and PROD 4.

How to Conform Practically:

1. Audit Your Data: Immediately review your client onboarding and renewal processes to ensure you are consistently capturing the necessary financial and staffing data to accurately apply the new FOS-aligned thresholds.
2. Define Your Perimeter: Clearly document which segment of your clients you will continue to treat as “retail” (and thus subject to full Consumer Duty protections) and which you will treat as “commercial or other risks.”
3. Document Rationale: Record your decision. If you choose to apply a lighter touch to a larger commercial client, you must justify why their size, sophistication, and bargaining power means they do not require the same protections as a micro-firm.

💡 The My Virtual Compliance Advantage: We can provide a Client Categorisation Audit Template that automatically cross-references your client data with the new FOS thresholds, giving you a clear, compliant blueprint for applying the right level of protection to every client. Contact us for this.

Step 2: Implement a Risk-Based PROD Review Framework

The removal of the annual review mandate is perhaps the biggest time-saver, but you must replace the rigid deadline with a robust governance process.

How to Conform Practically:

1. Develop a Policy: Create and formally approve a new Risk-Based Product Review Policy. This policy must define what factors constitute a high, medium, or low-risk product (e.g., product complexity, distribution channel, frequency of complaints, new market entry, or unstable pricing).
2. Assign Frequencies: For every non-investment insurance product you distribute, the manufacturer must now determine and document an appropriate review cycle (e.g., 6 months for a high-risk product, 2 years for a stable, low-risk product). As a distributor, you must align with the manufacturer or ensure your own distribution reviews reflect this risk-based approach.
3. Record Everything: Every decision about review frequency must be documented, alongside the supporting rationale (i.e., the risk factors considered). This documentation is your key evidence for the FCA.

💡 The My Virtual Compliance Advantage: Our PROD 4 Risk Assessment Toolkit provides a structured scoring model and pre-populated list of risk factors, allowing your compliance officer to assign a fully documented, justifiable review frequency in minutes, not days. Contact us for this.

Step 3: Shift Training from Hours to Outcomes

The removal of the minimum 15 hours of CPD gives you welcome freedom, but the underlying duty of competence remains paramount.

How to Conform Practically:

1. Focus on Competence: Review your Training and Competence (T&C) scheme. The focus must now be entirely on ensuring employees have the necessary skills, knowledge, and expertise for their specific roles—especially those that involve direct client contact and adherence to the Consumer Duty.
2. Targeted Development: Instead of generic CPD logs, implement targeted training based on identified gaps. For example, if your firm handles a high volume of vulnerable customers, your training must prove competency in identifying and supporting those customers.
3. Simplify Record Keeping: Stop tracking hours. Start recording the purpose, content, and successful outcome of the training. A quick sign-off on a short, effective module is better evidence of competence than a long, irrelevant CPD certificate.

💡 The My Virtual Compliance Advantage: We help you transform your T&C framework, auditing your current training for relevance and providing simple Competency Assessment Templates that link training directly to SM&CR responsibilities and Consumer Duty outcomes. Contact us for this.

READ ALSO: SM&CR in 2026: 4 Key FCA Shifts UK Insurance Brokers Must Act On

Conclusion: Flexibility Demands Better Governance

PS25/21 is a landmark moment. It allows brokers to escape the “admin trap” and focus on innovation and growth. However, this regulatory freedom is granted under the expectation that you will adopt stronger, smarter, and better-documented internal governance.

My Virtual Compliance is here to ensure that you don’t trade compliance for complexity. We translate the FCA’s flexibility into clear, actionable, and ready-to-implement tools for your firm.

Ready to start simplifying your compliance processes today?

👉 Book a compliance check call with My Virtual Compliance to assess your firm’s readiness for the new PS25/21 rules and secure your new compliant templates.

The post FCA Compliance Just Got Simpler: PS25/21 Unlocks Time and Growth for Your Brokerage appeared first on My Virtual Compliance.

While this data spotlights insurers, it demands immediate action from distributors like you to ensure your products demonstrably deliver Fair Value and meet the robust expectations of PROD and the Consumer Duty.

For time-pressed compliance leaders and directors at SME brokerages, this guide translates the regulator’s data release into clear, actionable steps for a smooth, auditable annual review.

READ ALSO: SM&CR in 2026: 4 Key FCA Shifts UK Insurance Brokers Must Act On

Understanding the Regulator’s Focus

The FCA publishes this data to enhance market transparency and provide objective indicators for assessing value across general insurance products. This dataset offers crucial market insights into products, including:

• Claims Frequency and Acceptance Rates
• Average Pay-outs
• Claims Complaints Rate

Your Key Takeaway as a Distributor

The FCA utilizes this data to assess the market and intervene where they identify low value. Your responsibility is to use this external benchmark to inform and validate your own annual assessments, ensuring the products you distribute are not outliers and continue to represent a good outcome for the customer.

Why This Data Triggers Your Annual Compliance

The Value Measures publication serves as a timely reminder that your annual product review is due. This compliance obligation is anchored in two foundational regulatory requirements:

1. PROD: The Annual Review Obligation

Under the Product Oversight and Governance Sourcebook (PROD 4.2.34R–35R), all insurance manufacturers and distributors are required to review their products at least annually. This review must confirm that the product continues to:

• Deliver fair value.
• Meet the needs, characteristics, and objectives of its target market.

Crucially, this annual requirement applies to every product you distribute, even if the manufacturer doesn’t specifically report on it in the Value Measures data.

2. Consumer Duty: Evidencing Fair Value

The annual PROD assessment is the primary mechanism for demonstrating compliance with the Consumer Duty’s Price and Value Outcome (PRIN 2A.4). This requires you to evidence that the product provides a reasonable balance between price and customer benefit throughout its entire lifecycle.

For brokers, this means:

You must show that your distribution arrangements, including your own remuneration, are consistent with the product offering fair value, and you have adequate oversight of the manufacturer’s initial assessment.

READ ALSO: The Ultimate Q4 Checklist: How to Prepare for Your End-of-Year FCA Compliance Review

3 Actionable Steps to Strengthen Your 2025/2026 Review

We are currently helping our clients integrate this new data for a robust and defensible annual review. Here are the three critical steps your firm should be taking now:

1. Benchmark Your Portfolio Against Market Indicators

Do not rely solely on the manufacturer’s data. You must strategically integrate the FCA’s Value Measures data to:

• Validate the Manufacturer’s Assessment: Cross-reference the claims acceptance rates and pay-out ratios of the products you distribute against the aggregated market benchmarks released by the FCA.
• Identify Potential Outliers: If a product you distribute shows significantly lower claims acceptance or a reduced payout proportion compared to the market average, you must have clear, documented justification for why you continue to distribute it.

2. Integrate Findings into Your Governing Body Report

Your Consumer Duty Governing Body Report must be completed at least annually. The findings from this product review are essential inputs.

• Track Trends: Use this year’s data to track progress against last year’s report. Are there positive or negative trends in value measures that require board attention or remedial action? 
• Demonstrate Oversight: This integration provides clear, executive-level evidence that the firm is actively reviewing and managing its obligations under the Price and Value Outcome.

3. Strengthen Your PROD Documentation

In the event of an FCA inquiry, clear documentation is your strongest defence. Ensure your records clearly demonstrate:

• Target Market Review: A re-confirmation that the product remains suitable for its identified target market, particularly considering the needs of vulnerable customers.
• Value Justification: A clear rationale justifying the value delivered to the end customer, especially in cases where complex distribution chains or high commissions are involved. The distribution costs must not detract from the product’s overall value.

Need Support Navigating Your Annual Review?

Effective product review under PROD and the Consumer Duty is a powerful tool for good governance and client retention.

My Virtual Compliance supports SME brokers by:

• Benchmarking their products against the current market data and FCA indicators.
• Integrating the latest data into the annual Governing Body Report.
• Strengthening documentation to clearly demonstrate full alignment.

Ensure your portfolio is compliant and auditable before year-end. Contact us now for a free consultation.

The post Value Measures Reporting: A Strategic Guide to Keeping Your Product Portfolio Compliant appeared first on My Virtual Compliance.

Fair Value isn’t a one-off exercise — it’s an ongoing responsibility to prove that your products and services deliver genuine benefit compared to the total cost customers pay.

This guide breaks down a four-step framework to help SME insurance brokers turn their Fair Value documentation into a living, breathing part of their compliance strategy.

READ ALSO: Vulnerable Consumers – What Insurance Brokers should be doing

Part 1: Gather the Right Evidence

The FCA expects brokers to evidence Fair Value — not just declare it.
That means collecting measurable data that shows customers are getting a reasonable deal.

Part 2: Highlight Your Non-Monetary Value

Fair Value is explicitly not just about being the cheapest option. For SME insurance brokers, the true value often lies in the non-monetary elements, the expertise and service that justifies your fee. This is your competitive edge and your primary source of defensible value.

Fair Value isn’t just about being the cheapest — it’s about justifying your fee through expertise and service.

Here’s how brokers can make that visible:

• Expertise & Advice: Show that your team’s skillset adds value. Link FVA evidence to your SM&CR records, training logs, and sector qualifications.
  Customers aren’t just paying for a policy — they’re paying for your judgment.
• Customer Support: Highlight your response times, account management model, or client portal features.
  These contribute to the “Customer Support Outcome” under Consumer Duty.
• Clarity & Communication: Simplify your policy documents and communications. Track reductions in customer queries or misunderstandings as proof of improved outcomes.

Part 3: Test the Entire Value Chain

Your Fair Value responsibility extends across the whole distribution chain, not just your own fees.
That means assessing the insurers and third parties you work with.

• Challenge Manufacturers: Don’t just file away an insurer’s Fair Value Assessment — compare it to your customer data. If complaints or poor outcomes appear, you have a duty to act.
• Spot Value Leakage: Review any third-party costs (platform, admin, etc.). If they add cost without customer benefit, that’s a red flag.
• Prove Oversight: Keep written records of your product selection process.
  Demonstrate you’ve chosen products based on value, not just commission.

Example: If one insurer’s product generates twice the claims delays of others, that evidence belongs in your FVA.

READ ALSO: The FCA’s fine to JLT- and 4 things you should do about it.

Part 4: Build a Continuous Review Framework

The FCA expects Fair Value to be monitored, reviewed, and refreshed — not left to gather dust.

Structure your review process around three pillars:

1. Defined Trigger Events: Set automatic reviews when key events occur, such as:
   • Spikes in complaints
   • Product changes
   • Commission or cost structure updates
   • Market price shifts
2. Annual Board Reporting: Your Consumer Duty Board Report should explicitly confirm compliance with the Price & Value Outcome, citing live data gathered during the year.
3. Align with PROD: Sync your Fair Value reviews with your Product Governance (PROD) cycle to save time and improve consistency.

Final Takeaway: Fair Value as a Growth Strategy

When done well, Consumer Duty compliance becomes a commercial advantage.
A transparent, data-driven Fair Value framework builds trust with customers, strengthens insurer relationships, and protects your firm from FCA scrutiny.

At My Virtual Compliance, we help SME insurance brokers build, implement, and automate their Fair Value and Consumer Duty frameworks — turning regulation into reputation.

Need help with your Fair Value Review or Consumer Duty Board Report?
Book a Consultation with My Virtual Compliance.

The post Beyond the Price Tag: How Insurance Brokers Can Prove Fair Value Under the FCA’s Consumer Duty appeared first on My Virtual Compliance.

The FCA’s expectations are shifting: firms must now prove how SM&CR drives culture, accountability, and customer protection in practice — not just on paper.

This article sets out the four biggest changes brokers need to prepare for by 2026, plus a practical checklist you can use to stress-test your compliance framework.

READ ALSO: The Ultimate Q4 Checklist: How to Prepare for Your End-of-Year FCA Compliance Review

Quick Refresher: What is SM&CR?

SM&CR is built on three pillars designed to make accountability crystal clear across firms:

1. Senior Managers Regime (SMR) – requires senior staff to have defined responsibilities documented in Statements of Responsibilities (SoRs).
2. Certification Regime – ensures individuals in roles that could cause “significant harm” are assessed as fit and proper at least annually.
3. Conduct Rules – set minimum standards of behaviour for almost everyone in the firm.

Together, these pillars place personal accountability at the heart of regulation — a principle the FCA is doubling down on for 2026.

4 Major SM&CR Shifts to Expect by 2026

1. From Consumer Duty Implementation to Enforcement

The FCA is moving beyond “implementation” of the Consumer Duty into a strict enforcement phase.

What this means:
Senior Managers will need concrete evidence that decisions and oversight are directly delivering good customer outcomes. Expect to provide data and MI showing how you prevent foreseeable harm, enable customers to meet objectives, and monitor value measures.

The FCA’s question will shift from “Do you understand the Duty?” to “Show us how you’ve embedded and measured it.”

2. Operational Resilience: From Policies to Proof

The operational resilience deadline has passed. By 2026, the FCA expects firms to demonstrate resilience as part of business-as-usual operations.

What this means:

• Firms must show they’ve mapped important business services, tested impact tolerances through severe but plausible scenarios, and learned from results.
• This covers not only IT, but also third-party suppliers, key staff absences, and market shocks.

Resilience is no longer about documents — it’s about proving you can withstand disruption without harming customers.

3. Governance Over AI and Technology

The FCA is increasingly focused on AI, algorithms, and data analytics in financial services.

What this means:

• While not yet a formal SMF requirement, firms should expect to assign clear accountability at Senior Manager level for technology and AI use.
• Brokers will need to show they are monitoring AI-driven pricing, avoiding data bias, and ensuring that tech doesn’t reduce customer understanding or service quality.

This is a developing area: the FCA’s AI Discussion Paper (DP5/22) and ongoing consultations signal that AI accountability is coming under sharper scrutiny.

4. Non-Financial Misconduct & Misconduct Disclosures: New Rules from 2026

From 1 September 2026, the FCA will extend the Conduct Rules (COCON) to cover non-financial misconduct (NFM), including serious bullying, harassment, discrimination, and violence.

These behaviours will be treated as Conduct Rule breaches, even where unrelated to regulated activity. Firms will also need to disclose serious, substantiated misconduct in regulatory references, closing gaps that have allowed individuals to move unchecked between firms.

What this means for brokers:

• Accountability: Senior Managers must ensure SoRs cover misconduct oversight and escalation.
• Policies: Update Conduct, Disciplinary, and Whistleblowing policies to define NFM and set clear investigation standards.
• Regulatory References (SYSC 22): References must cover the last six years — with no limit for very serious misconduct — and be updated if new facts emerge.
• Training & Culture: Staff and managers need role-based training on NFM, and firms must show evidence of safe reporting channels and consistent handling of cases.

Timeline: Published July 2025 → In force 1 September 2026. Firms should test updated processes ahead of go-live. Need help to stay compliant? Reach out to our team.

FAQs on SM&CR 2026

Q: How does SM&CR link to the Consumer Duty?
A: SM&CR provides the accountability mechanism — the FCA uses it to hold individuals responsible for embedding and evidencing Consumer Duty outcomes.

Q: What size of firm is affected by these expectations?
A: All regulated brokers, but the FCA will proportion its supervision. Smaller firms must still demonstrate accountability and resilience but can do so with proportionate frameworks.

Q: How does the NFM regime interact with Consumer Duty or conduct risk?
A: Personal misconduct may now trigger a Conduct Rules breach under COCON, even if unrelated to regulated tasks. This intersects with FCA expectations that personnel uphold behaviours consistent with customer-centric culture and harm prevention.

Q: What’s a “serious, substantiated misconduct” for reference purposes?
A: Misconduct you reasonably conclude is material to fitness and propriety, often involving harassment, abuse, violence, or other grave behaviour. For very serious matters, there’s no time limit on disclosure.

Q: Will brokers need a dedicated “AI Senior Manager”?
A: Not formally (yet). But the FCA expects clear ownership of technology risks at senior level, which should be documented in your governance framework.

Stay Ahead with My Virtual Compliance.

The FCA’s focus on evidence, data, resilience, and culture means brokers cannot afford a “tick-box” approach.

At My Virtual Compliance, we specialise in helping SME brokers stay ahead of shifting FCA expectations — from Consumer Duty board reporting to SM&CR stress-testing and AI compliance planning.

👉 Book your free compliance health check today and ensure your brokerage is FCA-ready for 2026.

The post SM&CR in 2026: 4 Key FCA Shifts UK Insurance Brokers Must Act On appeared first on My Virtual Compliance.

Nobody wants to deal with a surprise knock from the FCA. A little preparation now can prevent small issues from becoming big problems. It also shows the FCA that you take compliance seriously, which is a big plus. It’s about being prepared, not paranoid.

A proactive approach can prevent issues from escalating and help your firm run more efficiently. This article provides a clear, actionable checklist to help you navigate the end-of-year compliance landscape.

READ ALSO: The FCA’s fine to JLT- and 4 things you should do about it.

People & Processes (SM&CR Checklist)

The Senior Managers & Certification Regime (SM&CR) is all about accountability. The FCA wants to know that firms have a clear understanding of who is responsible for what. As a smaller firm, it’s easy to think this only applies to the big players, but that’s a mistake. A good Q4 review starts with a look at your people and the processes they follow.

The FCA wants to know that senior individuals are accountable for the actions of their firm and that staff are competent for their roles. A proactive Q4 review is the perfect time to address this. 

Start by reviewing your organizational structure. Do you have a clear Statement of Responsibilities for your senior managers? For certified staff, are you confident they are fit and proper to perform their roles? 

This review should go beyond just looking at job titles. It’s about understanding the specific duties and responsibilities assigned to each individual, from the top down. Once you’ve defined the people, look at the processes they follow. 

Do your procedures for new client onboarding, for example, align with regulatory requirements? Are there documented procedures for handling complaints, managing conflicts of interest, and reporting breaches? 

A thorough Q4 review allows you to identify any weak points in your operational processes. Strengthening these processes not only ensures compliance but also improves efficiency and reduces the risk of errors. 

By taking a proactive, two-pronged approach—focusing on both your people and your processes—you can demonstrate to the FCA that your firm is not only compliant but also well-managed and resilient. This approach goes a long way in building trust with both regulators and clients.

Here is a simple checklist to help you ensure you are compliant with the Senior Managers & Certification Regime (SM&CR).

Senior Managers & Certification Regime (SM&CR) Compliance Checklist

1. Senior Managers

• Statements of Responsibilities (SoRs): Have you reviewed and updated the SoRs for your Senior Managers? Any changes in their roles or responsibilities must be reflected here. Remember, these documents are a cornerstone of your firm’s accountability framework.
• Management Responsibilities Map: Does your responsibilities map accurately reflect how management and governance are structured within your firm? Ensure it’s up-to-date and clearly shows reporting lines and handovers.

2. Certified Staff

• Fitness & Propriety (F&P) Checks: This is a crucial, ongoing requirement. For all staff in certified roles (those who could cause “significant harm” to customers or the market), have you reviewed their F&P? This isn’t just a one-off check; it’s an annual assessment. Consider whether any new information or changes in circumstances would affect their ability to perform their role.
• Certification Process: Are you on track to issue annual certificates to your certified staff? Don’t leave this to the last minute. This process confirms that you’ve completed your due diligence on their competence and conduct.

3. All Staff

• Conduct Rules Training: All staff, from senior managers to administrative assistants, are subject to the FCA’s Conduct Rules. Have you completed the required training and reinforced a culture of good conduct? This is a great opportunity to remind everyone of the importance of acting with integrity and due care.

Client Files & Suitability (Spot-Check Action Points)

The FCA’s fundamental objective is consumer protection, which makes their scrutiny of how firms treat customers a top priority. 

To proactively prepare for this, the most effective strategy is to conduct a thorough internal audit of a representative sample of your client files. 

This process should go beyond a simple check for complete paperwork; it should be a deep dive into the entire customer journey. Reviewing a selection of client files allows you to assess the fairness and clarity of your advice, the transparency of your fees, and the overall suitability of the products you’ve recommended. 

By identifying and correcting any issues in a small sample, you can implement changes across your entire firm, ensuring that your practices consistently align with the FCA’s expectations for treating customers fairly.

Customer-Focused Compliance Checklist

Here is a checklist to help you ensure your processes and client files align with the FCA’s focus on consumer protection.

1. Review Your Process

• Information Gathering: Does your process for gathering and recording client information meet the requirements of the FCA’s handbook? Ensure you are collecting sufficient information to understand the client’s demands and needs, their risk tolerance, and their financial situation.

2. Sample Client Files

• Demands & Needs: Is there clear documentation showing you’ve understood the client’s specific demands and needs? This is non-negotiable.
• Suitability: Where advice was given, is there a clear record of why the recommended policy was suitable for that client? This should be a direct link between the client’s needs and the policy’s features.
• Disclosure: Have you properly disclosed all relevant information, including commissions and any potential conflicts of interest? The FCA is very focused on transparency around remuneration, especially since the introduction of the Consumer Duty.
• Record-keeping: Are the files complete and easy to navigate? The FCA expects you to be able to produce a clear audit trail of your client relationship and decision-making process.

Consumer Duty (Review & Board Report)

The FCA’s Consumer Duty represents one of the most significant regulatory shifts in recent years. It requires firms to go beyond technical compliance and demonstrate that they consistently deliver good outcomes for retail customers.

For SME insurance brokers, this means embedding customer-focused culture, testing processes against the four Consumer Duty outcomes, and evidencing how decisions benefit clients.

Q4 is the ideal time to carry out a Consumer Duty review — both to prepare for your end-of-year compliance sign-off and to ensure your Consumer Duty Board Report is up-to-date, accurate, and approved by your governing body.

This review should include:

• Assessing whether your products and services deliver fair value.
• Reviewing customer journeys for clarity and transparency.
• Checking whether your communications support informed decision-making.
• Ensuring robust governance, including Board oversight and reporting.

Consumer Duty Compliance Checklist

Review All Outcomes

• Products & Services: Do they meet the needs of your target market?
• Price & Value: Have you tested fair value across your product set, including commission and premium finance arrangements?
• Consumer Understanding: Are communications written in plain English, with clear explanations of exclusions, risks, and costs?
• Consumer Support: Can clients easily access help, make a claim, or complain without unnecessary barriers?

Board Report

• Has your firm produced a Consumer Duty Board Report this year?
• Does it clearly evidence monitoring of outcomes, value assessments, and remedial actions?
• Has the report been approved by your Board or governing body, and is it available for the FCA if requested?

Approval & Record-Keeping

• Do you maintain records of the data and MI used to evidence compliance with the Duty?
• Can you demonstrate how insights from complaints, file reviews, or customer feedback have been fed back into product governance and client care?

By embedding these practices, you can show both the FCA and your clients that Consumer Duty is not just a compliance exercise but a driver of better business.

Systems & Controls (AML & Data Security Review)

The final, crucial piece of the puzzle for any financial services firm is to ensure that internal systems are robust enough to protect both the firm and its clients. This involves fortifying your defences against a wide range of threats, with particular emphasis on financial crime and data breaches. 

The FCA holds firms accountable for preventing money laundering, fraud, and terrorist financing. This requires not only having clear policies and procedures in place but also implementing effective technology and training staff to identify and report suspicious activity. 

Similarly, the protection of client data is paramount, not just from a regulatory standpoint but also to maintain customer trust. A single data breach can lead to severe financial penalties, reputational damage, and a loss of customer confidence. 

Therefore, a comprehensive Q4 review must include an assessment of your cybersecurity measures, data protection protocols, and incident response plan. By proactively addressing these vulnerabilities, you can build a more resilient firm that is better equipped to withstand external threats.

Systems and Controls Compliance Checklist

Here is a final checklist to help you ensure your internal systems are robust enough to protect your firm and your clients from financial crime and data breaches.

Anti-Money Laundering (AML)

• Risk Assessment: Have you reviewed your firm-wide AML risk assessment to ensure it’s still accurate? Are you regularly screening new and existing clients for sanctions, PEP (Politically Exposed Person), and adverse media lists?
• Training: Have your staff completed their annual AML training? They must know how to identify and report suspicious activity.
• Record-keeping: Are your records of customer due diligence (CDD) and enhanced due diligence (EDD) up-to-date and easily accessible?

Data Security & Protection

• GDPR Compliance: As a commercial insurance broker, you hold sensitive client data. Are your data protection policies and procedures up-to-date? Are you only holding data for as long as you need it?
• Cybersecurity: When was your last cybersecurity review? The FCA expects you to have robust systems to protect against cyber threats. This includes firewalls, secure client portals, and a clear plan for what to do in the event of a breach.

Key Takeaways & Next Steps

Navigating an FCA compliance review can feel overwhelming, but it doesn’t have to be. By adopting this (Simple?) proactive, structured approach, you can identify and resolve potential issues before they become problems.

This year, the Consumer Duty has become the FCA’s central lens. That means your Q4 checklist must go beyond SM&CR, client file audits, and AML checks to include a thorough review of customer outcomes and the completion of your Consumer Duty Board Report.

Here’s what to do next:

• Finalise your SM&CR checks: Update Statements of Responsibilities, fitness & propriety reviews, and certification.
• Audit client files: Spot-check suitability, disclosure, and demands & needs documentation.
• Complete your Consumer Duty review: Test outcomes across products, value, communications, and support.
• Produce and approve your Consumer Duty Board Report: Ensure your Board has signed off, and that evidence is ready to share with the FCA if required.
• Re-test your systems & controls: AML, data protection, and cybersecurity should all be reviewed before year-end.

👉 Don’t wait for a letter from the FCA to get your house in order. If you’d like to talk through your Q4 compliance checklist or need support producing your Consumer Duty Board Report Get in touch with our team here, and we will help you stay compliant.

My Virtual Compliance offers bespoke compliance solutions and practical guidance for busy professionals just like you.

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1. The hangover from Covid-19 is still being felt, and is expected to last the whole year;
2. Most of 2020’s FCA rules were pushed into 2021 because of Covid-19; and
3. 2021’s FCA work and rules will still have to be implemented. 

We recently did a training session on our forecast of 2021. Here is a snapshot of what insurance brokers should expect:

If you are not quite sure where you stand in all these areas, we can help by providing a Horizon Scan of your business. My Virtual Compliance has been at the forefront of Compliance help, to ensure insurance brokers know how to navigate through these difficult times. 

Our Horizon Scan creates a high-level view of possible GAPs in your business and where to direct your efforts. 

For more information, ‘Click Here’ to ask about our free Horizon Scan, to help you plan for 2021.

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1. Your annual PMI compliance statement; and
2. Upload your tables of average no claims bonus (NCB) discounts

You can find out more information and complete this submission by using the online form which you can find on the government website below:

https://www.gov.uk/government/publications/private-motor-insurers-and-brokers-compliance-reporting-form

If you have any questions around how to do this, we are always happy to assist.

You might find it useful to follow us on LinkedIn as we will be sharing a lot of compliance information via our LinkedIn page too.

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