FCA Model Portfolio Services Review
If you’ve had an information request, you’re already on the FCA’s radar.
The FCA has been crystal clear: Model Portfolio Services (MPS) are now a regulatory priority, with a multi‑firm review focused on Consumer Duty, value for money and governance.
If you’ve received an information request, this isn’t a routine data grab – it’s the start of a pointy conversation about how you run your MPS and whether your clients are genuinely getting good outcomes. Here’s a clue: The FCA may have concerns about you already.
What the FCA will want to see
Firms should assume the FCA will test three big Consumer Duty questions:
Is your MPS genuinely designed around client needs and can you prove it to be so? Target markets, risk profiles, rebalancing, and use of underlying funds all need to line up with your Consumer Duty story, not just your marketing deck.
Can you really evidence fair value, or are you hiding mid-pack hoping to avoid detection? Fee structures, platform charges, overlay fees and any group conflicts must be clearly identified, mitigated and justified in the context of client outcomes.
Is your governance more than a committee calendar? Minutes, MI, challenge, escalation and remedial action all need to show that potential issues are anticipated at product development stage, and emerging risks spotted early and effectively remediated to ensure good client outcomes.
You’ll need comprehensive data to support your narrative, if you haven't already, start pulling it together now, so you know where your gaps are and how
If you’ve had an FCA information request, do this now:
You don’t control the FCA’s questions – but you do control the quality of your answers. Firms who respond well usually:
Map the request to your control framework. Link each FCA question to specific policies, committee papers, MI packs and testing activity, so your response tells a coherent story rather than a bundle of attachments.
Close obvious gaps before you reply. Where the request exposes weak spots (e.g. fee rationale, outcome MI, conflict management), formalise them through your risk governance, put proportionate fixes in motion, and explain them clearly in your response.
Align front‑office narrative with compliance, ensuring investment, distribution and compliance are giving the same explanation of how your MPS works, who it is for, and how you test outcomes.
Rehearse the “MPS walkthrough” and be ready to take the FCA through live examples – from client selection to portfolio construction, rebalancing, charging and review – with evidence at each step.
How Fractyl can help MPS firms right now
We’ve been FCA Wealth Management Supervisors, SMF holders across Operations, Risk, Compliance, Legal, Investment Management and Internal Audit, and have phenomenal bench strength. We focus on investment and wealth management governance – exactly where this MPS review is landing.
We will help you:
Stress‑test your MPS against FCA expectations with rapid diagnostic evaluations against Consumer Duty, fair value, distribution oversight and MPS governance, highlighting where your current framework won’t withstand supervisory scrutiny.
Build an “FCA‑ready” response pack, curated with sign‑posted evidence (policies, minutes, MI, testing) that answers the FCA’s questions clearly and shows a credible control environment – not just a document dump.
Tighten conflicts, fees and oversight through an independent review of conflicts of interest, charging structures and oversight of in‑house vs third‑party portfolios, with practical governance fixes you can implement quickly.
Embed durable MPS governance through upgrade of your committees, MI and outcome testing so the story you tell the FCA now is still true in 12–24 months’ time.
Next steps
If the FCA has written to you about your MPS – or you expect them to – now is not the time for a “wait and see” approach.
We’re offering a focused, time‑boxed “MPS FCA‑Readiness Review” for selected firms over the next few weeks.
2–3 week turnaround
Clear red/amber/green view of your MPS risks
Draft narratives you can lift straight into your FCA responses
Message us or visit fractyl.com to book a short discovery call. One conversation now could save a world of difficult conversations later.
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