The FCA's 6% Problem, and What It Means for Consumer Communications
Speaking at the Investor Summit in London on 18 September, the FCA's Director of Consumer Investments, Lucy Castledine, put a number on something the industry has suspected for years. Only 6% of the pre-sale disclosure documents the regulator reviewed were written in plain English, measured against the Flesch-Kincaid readability standard. Ninety four per cent were rated difficult or fairly difficult to read. For firms that spent the summer responding to CP26/24 on simplifying consumer investment disclosures, the speech is less a new policy than a preview of how the regulator intends to judge whatever comes out of it.
What was said
Castledine's speech tied together several strands of the FCA's consumer investments agenda rather than announcing anything new on its own. She confirmed that the Consumer Composite Investments regime, known as CCI, replaces the old UCITS KIID and PRIIPs KID templates and gives firms flexibility to design product information around what customers actually need to understand, rather than a fixed template stuffed with disclosure for its own sake. She welcomed the Investment Association's work on rethinking standard risk warnings, putting the current approach bluntly, saying "risk disclosures should not be a box-ticking exercise." She also used the platform to flag a related concern, unregulated mini-bonds and loan notes marketed to retail consumers outside the FCA's perimeter, and called for a government review of the exemptions that allow this. Three days later, the FCA's High Court action against Hunter Jones, over alleged unauthorised activity, suggested that call is already being backed up with enforcement, not just words.
Why the timing matters
None of this happens in a vacuum. CP26/24 closed on 21 August, and the FCA's own commentary since has made clear that plain-English testing, not just sign-off from compliance, is becoming a real measure of whether disclosure reform has worked. Firms that treat the CCI regime's new flexibility as simply "less to fill in" will have missed the point. The flexibility exists so that communications can be tested and refined against comprehension, not just legal defensibility. The FCA's own Consumer Duty supervision has already shown it is willing to open investigations where firms cannot evidence that customers understood what they were sold, not just that they were told it.
For platforms, DFMs and advice businesses operating through wrap and SIPP structures, this lands squarely on documents that were often drafted once, years ago, and rolled forward with minimal review since. Key features documents, platform terms, model portfolio factsheets, and the risk warnings bolted onto factsheets and illustrations are the obvious targets.
The practical gap most firms still have
Two things tend to be missing when we look at this with clients. First, readability testing is rarely built into the document sign-off process at all. It sits, if anywhere, as a one-off exercise done ahead of a regulatory deadline rather than a standing check applied to every new or amended communication. Second, the people who actually write customer-facing material, marketing, platform product teams, paraplanners, are rarely in the same room as the people who own regulatory sign-off. That is exactly how documents end up legally accurate but practically unreadable.
Where Trescore fits in
This is proposition and governance work as much as it is compliance drafting, which is exactly where we sit. Having produced Trescore's own consultation response work on CP26/24 for platform and SIPP clients, we can run a practical readability and comprehension audit across key customer communications, benchmark it against the FCA's findings, and help build the joint sign-off process that keeps documents both accurate and actually readable. This is not legal advice, and we do not position it as such.
If you want to talk through what this means for your own customer communications, get in touch with your Trescore contact.