When someone’s spent nearly two decades at the FCA and helped shape the way firms are supervised, you listen. And when that someone has recently moved to a consultancy to help firms handle their regulatory risks from the other side, you know they’ve got valuable insights to share. IFA Magazine’s Senior Financial Journalist, Jenny Hunter, spoke to Ritchie Thomson, who recently joined Isio after a long career at the regulator. He reflects on what has changed in the advice industry, what’s stayed the same, and what firms should be thinking about next.
A career shaped by regulation
Ritchie’s been in the industry for decades, with roles spanning life insurance companies, networks and nationals before landing at the FCA (then FSA). “I think it was 19 years I did there, just short of 20,” he said. During that time, he worked on everything from treating customers fairly, to DB transfers and retirement income advice.
While at the FCA, Ritchie was known for being a regular on the adviser conference circuit, something he genuinely enjoyed. “I always enjoyed that, having that connection with the sector and being able to speak to people and get challenged by advisers,” he said. “I kind of missed that… but I’ve noticed the FCA has started doing more of that again now.”
His new home at Isio, a consultancy with deep pensions expertise, feels like a natural next step. “I was impressed with the culture and the approach in the team,” he said. “It’s a good fit and gives me the opportunity to use my regulatory experience to help firms more directly.”
Getting to grips with DB advice
One of the major chapters of Ritchie’s regulatory career was tackling the complex world of defined benefit pension transfers, particularly after pension freedoms were introduced.
“I had quite a big role in actually getting the regulator to look at this issue fairly early on in 2015,” he explained. “It was good that I did, because it got us into a position where we were able to respond to the challenges that then came down the line in 2017 and 2018.”
Ritchie acknowledges that mistakes were made, both by the regulator and by firms. “I think where advisers went wrong was often that they were trying to please the clients… but unfortunately, they weren’t considering if it was really the best thing in their long-term interest”
That said, he’s quick to point out that most of the failings he saw weren’t malicious. “The vast majority was basically the clients who were knocking on people’s doors asking if they could transfer, and advisers did not probably do as good a job as they could have done.”
Ongoing advice under the microscope
From DB transfers to ongoing advice – another regulatory hot topic that Ritchie has been closely involved in. While the FCA’s recent review was delivered in relatively soft language, Ritchie doesn’t think firms should get complacent.
“I think it’s a call for action,” he said. “Some firms are thinking, ‘This is an opportunity for us to sort this out before they come and have a look.’ And I think that’s the right approach.”
For those who haven’t yet taken stock of their ongoing advice models, the message is clear: don’t wait. “There’s a chance to grasp the nettle… If you don’t do anything at all, you will be in a difficult position if the FCA start asking questions”.
Walking the compliance and client care line
So how can advisers balance commercial pressures with regulatory expectations and good client outcomes?
“Advisers have to always act in the client’s best interest,” said Ritchie. “But there’s a lot of compatibility between the client’s interests and those of the firm. If you’re trying to build a long-term sustainable business, your client bank is your core asset.”
Still, applying judgment isn’t always easy, particularly when the rules are increasingly principles-based. “We’re going through another round of asking if we can reduce specific rules and rely more on Consumer Duty and other principles?” he explained. “Some firms welcome that, but others ask, ‘What does it mean in practice?’”
The FCA, he added, is walking a tightrope. “They have to speak in a way which is legally correct… so that inevitably means sometimes the language is difficult”.
The risk that keeps coming back
One area Ritchie believes continues to trip firms up is record-keeping. And it’s not about deliberate misconduct; it’s about not having enough information on file to demonstrate advice was suitable.
“What you see are records which don’t tell you whether advice is suitable or not,” he said. “Bits have been lost, or there’s contradictory information. That’s the thing that often causes firms the biggest problem.”
On the positive side, he’s seen improvements in recent years thanks to better back-office systems and processes. “Probably more recent years, it has got better… but further back you go, the less that’s the case.”
Can AI help?
We couldn’t have this conversation in 2025 without talking about AI. While Ritchie sees the potential, he’s also cautious.
“It does open up a lot of questions… Does the firm really understand how its AI model is actually working?” he said. “Automation is undoubtedly going to change the market, but how and in what ways is difficult to understand at the moment.”
His advice? Watch carefully, but don’t rush in. “There’s a heavy trepidation, I think, about committing too much to it. Probably quite a lot of waiting to see how others get on with it.”
What about contingent liabilities?
Another challenge on firms’ radars is the FCA’s continued focus on contingent liabilities, especially those linked to past DB advice. The regulator’s Polluter Pays initiative and a 2023 consultation on capital deduction for redress are clear signs of this.
“If that comes in, then all firms are going to have to look at their business, look at their back books, identify contingent liabilities, and, where necessary, hold extra capital,” said Ritchie. “It’s not an easy task.”
He suspects there may be some hesitancy at the FCA too: “Maybe there’s a bit of concern… between the balance between growth and the economy and requiring a lot of firms to hold more capital.”
Looking ahead: what next?
So, what’s on Ritchie’s radar when it comes to future conduct risks?
“I don’t think we’re done yet with ongoing advice,” he said. “And I don’t think we’re done with retirement income advice either.”
Consumer Duty also continues to evolve, particularly the expectations around fair value. “That’s the big change,” Ritchie noted. “Fair value is a new thing for the regulator to come out and say explicitly that they expect. That’s quite a shift.”
And as for crypto? “I think the financial services sector is going to have to accept it’s here to stay,” he said. “We could see changes there.”
Simplified advice, too, may reshape the market. “That might create new and different risks and opportunities for firms.”
Summing it up…
Ritchie’s perspective is a refreshing blend of realism and optimism. He’s under no illusion that running a compliant, client-focused advice firm is easy, but he believes it’s doable with the right mindset and approach.
“It’s always best to be proactive and sort your own problems out,” he said. “Rather than have the regulator come along.”
And for firms wondering what the regulator wants, Ritchie had this to say: “ The FCA try to say it simply… but the FCA have got to think about not just your business, but the next one and the one after that, and there all different. It’s complex, but there’s a willingness to work together.”
With Consumer Duty, AI, and new regulatory developments all reshaping the advice landscape, there’s plenty for firms to think about. But with a little preparation, a lot of care, and a healthy respect for the past, they can rise to the challenge.
About Ritchie Thomson
Ritchie Thomson is a Strategic Adviser at Isio, where he brings over two decades of senior regulatory experience from his previous role at the Financial Conduct Authority (FCA). At the FCA, Ritchie held a series of influential roles shaping the UK’s financial advice regulatory landscape.
During his 20-year tenure at the FCA, Ritchie led supervisory work across the advice sector, playing a central role in the development and oversight of key regulatory initiatives. He established the FCA’s team responsible for DB pension transfer oversight and was the principle architect of the ongoing advice review, the finds of which were published in 2025.
At Isio, Ritchie advises clients on complex regulatory reviews, engagement with regulators, and the management of legacy advice risks.
