💣 The End of Asset-based “Ongoing Advice” Fees?

Why the FCA’s next consultation could collapse the AUM fee habit — and usher in a trust-first model

What’s happening. The FCA has confirmed it’s working toward a Q1 consultation on changes to the rules governing ongoing advice — the annual-fee model most wealth firms rely on. This follows its multi-firm review of 22 large advice firms and public remarks that it has stopped firms charging ongoing fees to deceased clients. The direction of travel is clear: prove value, deliver service, or stop billing.

Source: Citywire+3Citywire+3FCA+3

Why now?

Consumer Duty bite. Under the Duty, ongoing fees must represent fair value with evidence of delivery (e.g., annual reviews with records, actions, outcomes). Source: FCA
Supervisory findings. The FCA found suitability reviews were delivered in the vast majority of sampled cases — but it also flagged weak controls, disengaged clients still paying, and refund risks where service wasn’t delivered. Translation: the bar for evidencing value just went up. Source: FCA+1
Public trust pressure. From high-profile fee and record-keeping scandals to legacy charging practices, the social licence for “set-and-forget” fees is thin. Reform is inevitable. Source: The Times

What could change (and why it’s existential for AUM revenues)

Expect consultation proposals to clarify:

What counts as ongoing advice (and what doesn’t).
Periodic suitability: frequency, depth, and evidence standards.
Disengaged clients: stricter stop-charge and refund expectations.
Record-keeping & MI: proof of service, not promises. Source: Citywire+1

If the rules demand clear, auditable value for every pound billed — and require fees to stop when clients disengage — the recurring AUM revenue base shrinks to what’s truly delivered and evidenced.

SUD vs. STP — the lens that explains the shift

Structurally Untrustworthy Discounts (SUD): Business models that look cheap or convenient (e.g., bundled AUM fees) but embed hidden costs/risks — like paying for service you don’t receive, inertia billing, or opaque entitlements.
Structurally Trustworthy Premium (STP): Models that may look different up front, but make value explicit, modular, and controllable — you pay for clearly defined work with transparent scope, outcomes, and ownership of data.

The FCA’s trajectory converts a regulatory nudge into a market sorting: SUD models lose privilege; STP models gain advantage. Source: FCA+1

The AoLP alternative: replace extraction with empowerment

AoLP’s ecosystem is already aligned with STP:

Planning My Life (PML): Client-led planning with clear modules; no default “forever fees.”
Financial Life Coach (FLC): Done-with-you support, priced for scope and outcomes, not asset size.
GAME Plan™: Life-first architecture — Goals → Actions → Means → Execution — where money serves the plan, not vice versa.

This is structural trustworthiness in practice: transparent scopes, client control, auditable artefacts, and no charging for silence.

What to do now

For consumers

Ask your firm to show last year’s review artefacts (agenda, suitability update, actions taken, follow-ups).
If you didn’t get the service, request a fee stop and refund for undelivered elements under Consumer Duty principles. Source: FCA

For planners

Unbundle ongoing service into modular scopes with evidence checkpoints.
Automate MI that proves delivery (meeting notes, suitability deltas, actions, client acknowledgements).
Stop fees on disengagement as policy, not exception. Source: FCA

For policymakers & allies

Clarify definitions (ongoing service, disengagement, periodic suitability).
Mandate stop-charge triggers and proportional refunds.
Standardise evidence templates so consumers (and small firms) can comply without friction. Source: Citywire

Bottom line

The FCA is poised to redefine what “ongoing” actually means. Models that rely on inertia will contract; models that evidence value and empower clients will expand. That’s good for consumers, good for principled planners — and good for trust in UK finance. Source: Citywire+1

Work with us

If you want a structurally trustworthy way to serve clients — or to become your own planner with transparent guardrails — join the Academy’s next cohort and swap extraction for empowerment.

Visit the Academy of Life Planning for details.