Replacement Business Health Check: Is Your Firm Managing the Risks the FCA Is Actively Scrutinising Right Now?

Replacement business is one of the oldest conduct risks in financial services — and one that continues to generate regulatory findings, redress requirements, and in serious cases, enforcement action. The FCA has been clear: recommending that a customer switches, transfers, or cancels an existing product in favour of a new one carries significant responsibility. That responsibility sits with the firm and the individuals who made the recommendation.Yet despite years of supervisory focus and published guidance, many firms are still not running the checks they need to. Oversight frameworks are inconsistent, file reviews aren't capturing the right information, and commercial incentives are quietly undermining the objectivity that good advice demands.In this episode, we walk through what a Replacement Business Health Check involves, why it matters under the current regulatory climate, and how to structure a review that gives your firm genuine assurance — not false comfort.We cover:— What the FCA means by replacement business, and why the definition is broader than many firms assume — covering pension transfers, investment switching, insurance replacements, and mortgage refinancing— The conduct risks the regulator consistently identifies, including inadequate comparison of surrender values, insufficient documentation of client objectives, and failure to evidence that the replacement genuinely serves the customer's best interests— How Consumer Duty has sharpened the regulatory lens on replacement business, and what the outcomes-focused framework means for evidencing suitability and value— What a file-based review should actually examine — the specific data points, red flags, and documentation standards that distinguish a robust audit from a superficial compliance exercise— How to design a management information framework that gives Senior Managers genuine visibility of replacement business volumes, trends, and outcomes before they become systemic problems— Common weaknesses identified during FCA supervisory visits and Section 166 reviews, and the remediation steps firms are being required to take— How to assess whether your current policies, training, and oversight controls are proportionate to the volume and complexity of replacement business your firm writesWe draw on FCA thematic review outputs, published Final Notices, and supervisory statements to ensure this episode reflects what the regulator is genuinely focused on right now.Resources mentioned in this episode:— FCA Thematic Reviews on Pension Transfers and Investment Switching: fca.org.uk— COBS 9 and COBS 19 — Suitability and pension transfer rules— FCA Consumer Duty — PS22/9— The Compliance Playbook (free resource): https://bit.ly/CP202602A — practical guidance on SMCR responsibilities mapping, AML risk assessments, operational resilience, and more. Built by qualified regulatory consultants. No email capture, no sales pitch.Subscribe, follow, and leave a review — it helps more compliance professionals access content grounded in real regulatory practice.Have a topic you'd like covered? Visit complianceconsultant.org or connect on LinkedIn at linkedin.com/company/compliance-consultant-ukCompliance Consultant — Making Compliance Work.