FCA looks to simplify cost disclosures for consumer investments

What does this mean?

The FCA is proposing to consolidate its cost disclosure rules into a single, more consistent framework built around Consumer Duty principles. The CCI regime, finalised in December 2025, replaces previous disclosure documents with a CCI "product summary" and a standardised presentation of costs and charges. These proposals extend that approach to the wider cost disclosure rules. 

Scope

The proposals would primarily affect firms that produce cost disclosures at the point of sale and in ongoing reporting, such as firms carrying on non-MiFID investment business and insurance distribution, financial advice firms, investment platforms and execution-only brokers.

The MiFID-derived rules would extend beyond CCIs: they also apply to services relating to direct equity and bond holdings and to model portfolios bought on a platform. They would also cover professional as well as retail clients.   

Pensions would be largely carved out and remain subject to their existing rules, although pre-sale pension services costs would need to follow the new COBS 6A methodology.

A single disclosure framework

The FCA proposes to bring the existing requirements together into COBS 6A, removing the distinction between MiFID, IDD and non-MiFID business where possible, and to move related high-level disclosure requirements into the same chapter. It states that this should reduce duplication and the need to maintain parallel processes, while allowing firms to rely on the same underlying cost data across the CCI regime and their wider disclosure obligations.

The FCA does not propose to prescribe a template or format. Instead, it would require firms to rely on the Consumer Duty to determine how best to present cost information.

Disclosing costs before and after a sale

Before a sale, firms would need to disclose a single figure combining the ongoing costs of the product. The costs of the service would be presented on a personalised, annualised basis as both a cash amount and a percentage. One-off costs, transaction costs and performance-related fees would need to be shown separately.  The ongoing costs of closed-ended investment funds (CEIFs), as an indirect cost, would be disclosed separately with an explanation and excluded from the combined figure.

After a sale, firms would need to disclose the total costs incurred over the reporting period (as both a cash amount and a percentage), as well as how those costs have reduced investment performance and the individual components of that total. E.g., one-off costs, transaction costs and any performance or exit fees. The post-sale total would continue to exclude the indirectly borne costs of CEIFs.

The FCA acknowledges that firms can find it difficult to obtain precise cost data from others in the value chain. It therefore proposes to permit a ‘reasonable estimate’ of the costs actually incurred where obtaining exact figures would require disproportionate effort.

Additionally, the FCA proposes to remove most of the detailed disclosure requirements for professional clients while retaining a high-level obligation to provide transparent cost information. Eligible counterparties would generally receive only high-level cost information.

Cash holdings and ‘double dipping’

The FCA proposes clearer disclosure of the interest paid and any fees charged on cash balances, codifying the position set out in its 2023 Dear CEO letter. A firm would be allowed to charge fees on cash holdings only if it passes on the interest earned in full. A firm that retains the interest would not also be able to charge a fee. Firms would explain how the interest rate is set and remind customers of the rate. These requirements would not apply to professional clients or eligible counterparties.

Additional changes

• For non-MiFID business, the current requirement to disclose "the total price to be paid by the client" would be replaced with the new pre-sale approach. It would also introduce a new requirement to provide regular post-sale cost disclosures showing how costs have affected performance.

• The FCA proposes to remove the IDD-derived rules on disclosing intermediary and staff remuneration, on the basis that the Duty's standards on fair value and incentives should address the same concerns.

• Cumulative effect illustrations would be removed and replaced with a requirement to show in post-sale reporting how costs have reduced performance over the period.

What do firms need to do?

Firms should engage with the consultation and form an early view of where the proposals would have the greatest impact across their disclosure obligations and operating models. Firms with mixed retail and professional client books, or with pension products that would sit outside the new COBS6A, will benefit from a clear internal view of where the new rules would apply if taken forward.

The FCA has purposefully aligned the 18-month transition period for these proposed changes with the implementation timeline for the CCI regime. This gives firms flexibility over when to adopt the new framework. Firms should consider how best to fold wider cost disclosures work into existing CCI workstreams, drawing on work done to date, rather than run a separate programme. Firms may also find it useful to engage industry bodies to help shape emerging market practice. 

Firms with EU operations should consider the extent to which they may be required to maintain parallel compliance models (i.e. where MiFID, IDD, PRIIPs, UCITS disclosures are still required in the EU) efficiently and limiting unnecessary duplication of cost, resource and process across the two.

Next steps

The consultation closes on 21 August 2026, and the FCA intends to publish final rules by the end of 2026. The new cash interest disclosure requirements would take effect from June 2027, with the wider COBS 6A framework applying from June 2028.