The FCA Wants to Simplify Suitability. Here's Why That Makes the Paraplanner's Job More Important Than Ever

There's a word the FCA keeps using in CP26/10, its March 2026 consultation on simplifying the pensions and investment advice rules.

That word is proportionate.

Firms should gather proportionate information. Apply proportionate judgement. Document in a way that is proportionate to the complexity of the advice.

On the surface, this sounds like less work. Shorter fact finds. Leaner suitability reports. A lighter regulatory touch.

I'd argue it's actually the opposite.

What CP26/10 Actually Changes

The headline proposals are significant. The FCA wants to consolidate COBS 9 and COBS 9A into a single, unified suitability framework - COBS 9C. It's replacing the requirement to obtain "necessary" information with "sufficient" information. It's scrapping mandatory annual suitability reviews in favour of periodic ones. And it's creating a streamlined pathway for simplified advice on straightforward transactions.

The direction of travel is clear: the FCA wants to reduce the defensive compliance behaviour that has made full holistic advice the default response to every client interaction, however simple. As the FCA's own consultation acknowledges, firms have been collecting far more information than they need not because clients require it, but because advisers are hedging against future regulatory challenge.

The result has been lengthy suitability reports that nobody enjoys writing and clients rarely read. The FCA wants to change that. I understand why.

But here's what often gets missed in the commentary.

Principles-Based Regulation Demands Better Judgement, Not Less

When rules are prescriptive, compliance is relatively mechanical. Tick the boxes. Gather the required information. Follow the template. The process protects you.

When rules become principles-based, when the question shifts from "did you follow the process?" to "did you exercise appropriate judgement?" the burden moves from procedure to reasoning.

Under CP26/10, firms will need to make active, defensible decisions about what information is sufficient for a given recommendation. A pension switch for a complex client in drawdown requires a fundamentally different level of analysis than an ISA top-up for a straightforward accumulation case. The rules will say: you decide. But your Consumer Duty obligations will require you to evidence that the decision was right.

That evidencing lives in the suitability report.

And a suitability report that contains proportionate, well-reasoned, clearly articulated analysis not a bloated compliance document, but a genuinely purposeful piece of technical writing, is significantly harder to produce than one built on a standard template.

The Skilled Paraplanner Becomes More Valuable, Not Less

This is the part that I think gets lost in the "simplification" narrative.

A paraplanner who can calibrate the depth of a suitability report to the complexity of the case, who understands when a critical yield analysis is essential and when it isn't, who can write a clear and proportionate rationale for a pension consolidation without either over engineering it or leaving gaps, is not doing less work under CP26/10. They're doing more skilled work.

The firms that will navigate this transition well are those with experienced technical resource that can make those judgement calls confidently. Not junior paraplanners working from rigid templates. Not advisers writing their own reports between client meetings. Skilled practitioners who understand both the regulatory intent and the technical substance.

What This Means Practically

If you're running an advice firm and thinking about what CP26/10 means for your processes, here are three questions worth sitting with:

1. Can your current suitability reports be calibrated? Or are they built on a one-size-fits-all template that adds length regardless of case complexity? Proportionality requires flexibility in your documentation approach.

2. Who is making the judgement calls? Under a principles-based framework, someone in your firm needs to own the decision about what's sufficient for each case. That's a technical skill, not an administrative one.

3. Are you ready for multi-firm scrutiny? The FCA has signalled it will continue reviewing suitability standards across the market. A shorter report is not a lower-quality report, but the reasoning needs to be sharper, not absent.

The Opportunity

CP26/10 is a genuine opportunity for the advice profession. If it works as intended, it will free advisers to offer more proportionate, accessible services to more clients and reduce the regulatory friction that has made simplified advice feel too risky to attempt.

But the firms that benefit will be those that invest in technical quality rather than assume simplification means less rigour.

The suitability report isn't going away. It's evolving. And in a principles-based world, the quality of the thinking behind it matters more than ever.