UK firms warned to work proactively and cooperatively with the FCA

The speech by Therese Chambers, joint executive director of enforcement and market oversight at the FCA, reaffirmed the regulator’s commitment to holding financial services firms to high standards. Chambers emphasised that those firms which are “open and honest with us, rather than trying to muddy the waters and keep us from doing our job” will be treated more favourably, with the prospect of avoiding skilled persons reports, formal requirements, and enforcement referrals.

“There are prizes for firms that choose to behave well. If you choose to do the right thing from the jump, you’ll have nothing to worry about,” Chambers said.

“For example, you wouldn’t need to worry about a cooperation credit to reduce a penalty because we wouldn’t take enforcement action in the first place.”

Chambers also highlighted that firms which are compliant from the start, which may increase costs in the short-term, save money because they do not have to worry about future penalties or redress and remediation.

This involves firms holding themselves to high standards and taking responsibility when things go wrong, including taking the necessary steps to fix issues and paying redress where necessary.

Sébastien Ferrière, an expert in financial regulation at Pinsent Masons, said: "The FCA’s message is clear: firms that choose to engage constructively and cooperatively from the outset tend to see better outcomes.”

“It’s a reminder that collaboration, not confrontation, often leads to more sustainable regulatory relationships,” he said.

“With the consumer duty now fully embedded, firms should be thinking about how to operationalise achieving good outcomes for consumers, not just documenting their governance, processes and controls. Firms which fail to do this can expect faster and more assertive action from the regulator.”

Jonathan Cavill, contentious regulatory expert at Pinsent Masons, said: “This is a good and timely reminder from the FCA that culture and conduct are not merely regulatory buzzwords, but also commercial imperatives.” 

“Doing the right thing as early as possible is about more than avoiding penalties and supervisory action; it is about building the FCA’s trust, firms’ resilience, and long-term value to customers and markets. Under the consumer duty, firms that proactively identify and remediate issues will both reduce regulatory risk and strengthen their client relationships,” he said. 

“Compliance may carry a cost, but as the FCA notes, the cost of non-compliance is far greater. The real challenge for firms is embedding this mindset into day-to-day decision-making, so that ‘doing the right thing’ becomes instinctive rather than reactive.”