Why the FCA’s “Dear CEO” Letter Demands More Than Compliance

Date: 24 June 2025

Author: Claire Cherrington

As someone who’s passionate about data—and firmly believes that a clear data strategy is key to driving real business value—I see the FCA’s latest “Dear CEO” letter outlined in a recent Citywire article as more than just a regulatory update. It’s a key moment for advice firms to reassess how they’re using data not just to comply, but to lead.

The letter, which is a data request seeking more information on 'business models, service proposition, resourcing and systems and controls', is being sent to CEOs of the UK’s 5,000 financial advice firms. Its message is clear: the FCA expects firms to be on the front foot when it comes to conduct, governance and accountability.

What’s in the letter?

At its core, the FCA is reminding CEOs of the vital role they play in setting the tone from the top. The letter focuses on several key areas:

• Meeting regulatory expectations
• Implementing robust systems and controls
• Building a culture that prioritises good client outcomes
• Embedding compliance throughout the business

A practical push – and a spotlight on data

What’s different this time is the how. The FCA is taking a data-led approach, using analytics to monitor compliance and identify risk earlier. This means firms must:

• Be ready for data requests
• Maintain accurate, up-to-date records
• Ensure their CRM systems can support timely, auditable responses

This isn’t just about having the right tools; it’s about using them strategically. Firms need to see data as a core enabler of compliance and customer outcomes, not just a reporting requirement.

Connecting the dots: the Advice Boundary Review

This data request also ties into the FCA’s broader Advice Boundary Review, which aims to improve consumer access to advice and guidance. It’s a signal that the regulator is looking at the entire advice ecosystem and expects firms to do the same. Reviewing your advice processes now will help ensure alignment with evolving expectations.

Why having a strong CRM is more important than ever

The regulatory landscape for advice firms is undergoing a marked shift, as the FCA intensifies its focus on proactive, data-led supervision, affordability and suitability. Driven by its strategy and the introduction of the Consumer Duty, the regulator is aiming to identify and reduce harm quicker by using data-led governance to assess firms’ behaviour across our sector. This has already been applied in the wealth management space and is now extending to advice firms. It reflects a desire to better understand evolving business models, monitor customer outcomes, and ensure consistent standards of delivery. 

The move comes at an important moment for the market. With fixed-rate mortgage deals taken out during the low-rate era now expiring, there’s a significant opportunity for firms to support clients through refinancing and remortgaging. At the same time, protection is back in the spotlight, as consumers become more aware of the need to safeguard their homes, incomes, and families in an uncertain economic climate.

For firms, this means moving beyond reactive compliance and embracing a proactive, agile approach—one that treats data as a strategic asset, not a byproduct, and embeds governance into the very fabric of operations.

So how do firms get ahead? By modernising systems to be scalable and auditable, strengthening third-party oversight, and building operational resilience. The firms that thrive will be those that treat regulation as a catalyst for innovation, not a constraint.

Final thought: compliance as a strategic advantage

The spotlight is on firms to show they’re ready, resilient and responsive. A robust CRM system is no longer a nice-to-have—it’s central to managing client relationships, demonstrating compliance, and delivering the kind of personalised, high-quality service that both regulators and clients expect. It also supports scalable, auditable processes that can adapt as regulatory demands evolve. The most effective platforms, like Acre, go beyond basic functionality, offering scalable, auditable processes that evolve with regulatory demands and support better governance by design.

Firms that treat system and data requirements as regulatory chores will always lag behind. The most agile firms embed governance into system design and treat management information (MI) as strategic fuel—fuel that powers both good customer outcomes and regulatory compliance in one motion. In today’s environment, agility isn’t optional—it’s a competitive advantage.

Let’s talk

If you’re unsure what this means for your firm or simply want a sense-check of your current approach, we’re here to help. Contact your regional key account manager and let’s talk about how we can support you to feel confident, compliant, and in control.