The FCA is reconsidering where some of the boundaries around retail regulation should sit, with two recent consultations pointing towards a regulatory framework that depends more closely on the customer, the firm's role and the circumstances in which an activity takes place.

In CP25/36, the FCA has proposed changes to the way firms distinguish between retail and professional clients. The current quantitative test would be removed, while the qualitative assessment would be strengthened and a separate wealth-based route introduced. The FCA has also proposed stronger safeguards around clients opting out of retail protections.

The FCA describes the objective as resetting how firms distinguish between retail and professional clients. The consultation closed in February and final rules have not yet been published.

Separately, CP26/23 proposes changes to the scope and application of the Consumer Duty. The FCA says it has seen the Duty applied more widely and intensively than intended, particularly in wholesale markets and complex distribution chains, and wants to clarify where it applies while allowing firms to take a more proportionate approach.

The proposals are different and are moving through separate regulatory processes, but together they illustrate a broader direction in the FCA's approach: greater differentiation according to the customer, the firm's role and the circumstances involved. For marketing teams, that makes it increasingly difficult to think about a communication as simply being compliant or non-compliant without also understanding the context in which it will be used.

The same content can sit in different regulatory contexts

The Consumer Duty sets standards for firms delivering products and services to retail customers, rather than applying in exactly the same way to every financial services relationship. Client categorisation is one of the mechanisms that can be relevant to establishing that boundary.

The FCA's proposed changes would alter how some of those categorisation decisions are made. Under the proposals, the existing quantitative test would be removed and the qualitative assessment of a client's expertise, experience and knowledge strengthened. A separate wealth assessment would provide an alternative route for clients meeting the proposed threshold.

For marketing teams, the important point is not the proposed threshold itself. It is that the regulatory treatment of a communication can depend on characteristics that are not contained in the communication.

The claims, imagery, performance information and disclosures in a piece of investment content might be identical wherever it appears, while the requirements governing it can vary according to who it is intended for, how it is distributed, the product being promoted and the rules applicable to the recipient.

The FCA's existing communications rules already recognise this. COBS 4.2 requires firms to take the nature of the client into account when ensuring relevant communications are fair, clear and not misleading. The accompanying guidance acknowledges that a communication to a professional client may not need to contain the same information, or present it in the same way, as one addressed to a retail client.

The useful question for a reviewer, then, is not always simply whether a communication is compliant, but whether it is compliant in the context in which the firm intends to use it.

The approval decision needs more than the asset

Marketing review has traditionally been heavily asset-centric. A document arrives with compliance, a reviewer checks its claims, qualifications, risk information, disclosures and wording, comments are returned, changes are made and approval is recorded.

There is a limit, however, to what the document itself can tell the reviewer. It may not establish who will receive it, how that audience has been categorised, whether the method of distribution is consistent with that categorisation or whether assumptions made when an earlier version was approved still apply.

This is where apparently simple questions about marketing approval become questions about organisational context. A reviewer may need the asset itself alongside reliable information about the campaign, audience, product, channel and applicable customer classification. In most organisations that information exists somewhere; the harder problem is making sure it is available when the decision is made and remains connected to that decision afterwards.

This matters particularly because marketing communications rarely remain static. Assets are adapted between campaigns, shortened for different formats, translated, reused by sales teams and redistributed through different channels. An approval that made sense in one context does not necessarily establish that the same content should be used in another.

Proportionality increases the importance of judgement

There is an apparent tension in regulatory simplification. Prescriptive rules can be burdensome, but they are often operationally straightforward: if every communication of a certain type has to pass through the same control, the organisation does not need to make much of a decision about which control applies.

A more proportionate regime can reduce unnecessary activity, but it also requires firms to distinguish between circumstances.

That is explicit in CP26/23. The FCA wants to clarify when and how firms in distribution chains can rely on one another and apply the Duty more proportionately. Its stated intention is to reduce unnecessary cost and complexity while preserving strong protections for retail customers.

A similar operational challenge appears in communications where the rules permit different treatment depending on the nature of the client. If different circumstances justify different approaches, someone has to establish which approach is appropriate, and the organisation needs to make that judgement consistently.

The challenge therefore moves from applying a uniform control to making a defensible distinction. That may mean fewer unnecessary checks in some circumstances, but it also puts more weight on the information and judgement behind the checks that remain.

Approval records may need to explain why

The FCA's client categorisation proposals also put greater emphasis on how firms determine that a client can be treated as professional. CP25/36 proposes removing the current quantitative test, enhancing the qualitative assessment, introducing an alternative wealth assessment and improving safeguards around clients opting out of retail protections.

That emphasis on the basis for a categorisation is relevant to marketing because regulated firms already retain evidence of approvals, but there is a difference between being able to show that something was approved and being able to understand the basis on which it was approved.

Where the applicable treatment depends on context, an approval record becomes more useful if it preserves that context too: the audience considered, the expected distribution, the regulatory requirements treated as applicable, the evidence supporting relevant claims and any limitations attached to the approval.

None of this necessarily appears in the final asset, yet it can be central to understanding the decision later. This becomes particularly important when content is revisited months after publication, when the final copy and an approval record may still exist but the assumptions behind the decision have been lost.

Professional status does not end the regulatory analysis

Where a client relationship falls outside the Consumer Duty, that does not mean communications with that client become unregulated. The Consumer Duty and the financial promotions and communications rules have different scopes.

Under COBS 4.2, firms must ensure relevant communications and financial promotions are fair, clear and not misleading, taking the nature of the client into account. The FCA's guidance also recognises that communications to professional clients can be treated differently from those addressed to retail clients while remaining subject to relevant communications requirements.

The current reforms should therefore not be understood as creating a simple division between regulated retail marketing and unregulated professional marketing. Different requirements can apply for different reasons, and client categorisation is only one part of determining what a firm needs to do.

For marketing and compliance teams, professional client status can change the context of the regulatory analysis. It does not end it.

The practical question is whether the workflow knows enough

Neither CP25/36 nor CP26/23 is a consultation about marketing workflows, but both expose an important operational question for regulated marketing teams. If the treatment of a communication depends on customer type, distribution arrangements, a firm's role and other contextual factors, approval processes need reliable access to that information when decisions are being made.

For some firms, this will already happen systematically. For others, the relevant context may be spread across campaign briefs, CRM records, emails, compliance policies, product documents and conversations between colleagues. Applying different standards consistently becomes difficult when the information determining which standard applies is itself inconsistently available.

The challenge is therefore broader than reviewing the words more efficiently. Firms need to preserve enough organisational context around a communication for reviewers to make the right decision and for someone looking at that decision later to understand why it was made.

The FCA's current direction should create useful flexibility for firms by removing unnecessary duplication and allowing greater use of proportionate judgement. For marketing teams, making use of that flexibility will depend in part on whether their approval processes can reliably distinguish between the circumstances in which different judgements are appropriate.

What teams need to know

What is the FCA proposing for professional client categorisation?

CP25/36 proposes removing the current quantitative test, enhancing the qualitative assessment firms carry out on clients, introducing an alternative wealth assessment and improving safeguards around clients opting out of retail protections.

These remain proposals. The consultation closed on 2 February 2026 and the FCA says it will publish feedback and issue a Policy Statement once it has reviewed the responses.

Is this part of CP26/23?

No. The proposed changes to client categorisation come from CP25/36.

CP26/23 is a separate consultation published in June 2026 covering the scope and proportionality of the Consumer Duty. Among other things, it proposes removing business with non-UK customers from the Duty's scope, clarifying where the Duty applies and making its application within distribution chains more proportionate.

The two consultations are relevant to the same broader discussion about the boundaries of retail regulation, but they should not be conflated.

Does professional client status remove financial promotion requirements?

Not automatically. The Consumer Duty and the financial promotions and communications rules have different scopes, and COBS 4.2 continues to require relevant communications and financial promotions to be fair, clear and not misleading.

The FCA's guidance also makes clear that application of this standard can take account of the nature of the client. A communication to a professional client may therefore be treated differently from one addressed to a retail client without falling outside communications regulation altogether.

What does this mean for marketing approvals?

It reinforces the importance of reviewing the context of a communication alongside its content. Where regulatory treatment depends on the recipient, product or method of distribution, those factors need to be known when the communication is reviewed.

Firms should also be able to understand later which context and assumptions an approval was based on, particularly before previously approved content is reused in a different setting.

Should firms change their processes now?

The changes proposed in CP25/36 are not yet final rules. The FCA has not given a specific date for its Policy Statement, saying only that it will publish one after reviewing consultation responses.

CP26/23 remains open for responses until 18 September 2026. For that consultation specifically, the FCA expects to publish its Policy Statement and make any new rules in Q1 2027.

Firms can assess whether their existing processes capture the context needed to apply different regulatory standards, but should distinguish clearly between current requirements and proposed changes when doing so.