Chancellor, Rachel Reeves, has announced financial services sector reforms that will look to cut regulatory red tape to attract investment and boost growth in the UK.

The Leeds Reforms will aim to make the UK a more attractive destination for financial services businesses, and include the Financial Services Growth and Competitiveness sector plan.

Through the reforms, the government hopes to break down barriers to attracting investment in the finance sector by encouraging greater risk taking, deregulation, and helping international companies set up in the UK.

Consumer Duty

The Treasury has hinted at changes to the Consumer Duty less than two years after its introduction.

It noted that the Financial Conduct Authority’s (FCA) Consumer Duty rules were intended to improve standards on how finance firms treat retail consumers.

However, the rules are affecting the way businesses interact with other businesses, such as investment banks and asset managers, the Treasury said.

Therefore, the FCA has been tasked with reviewing how the Consumer Duty applies to wholesale firms.

Deregulation

The reforms outlined several proposals aimed at cutting red tape, including the announcement that the Financial Ombudsman Service (FOS) will return to its initial role as a dispute resolution service, rather than acting as a quasi-regulator.

Its decisions will be more closely aligned to the FCA’s rules, with the government stating that this would take action on a key complaint about the unpredictable and inconsistent nature of redress action.

Meanwhile, the Senior Managers and Certification Regime will be streamlined to cut the burden on firms ‘in half’, as the government felt it has been implemented in a way that creates unnecessary costs for businesses.

A new concierge service will be introduced within the Office for Investment to ‘harness’ UK networks globally to court international financial services companies, promote the UK, and provide tailored support to help businesses plan where to invest.

Investment

Targeted support will be rolled out by the FCA from April 2026, which will enable banks to inform customers about investment opportunities to encourage them to move money from current accounts to equity investments.

There will also be a review of risk warnings on investment products to help people accurately judge risk levels, and the government will consider reforms to ISAs and savings to reach the ‘right balance’ between cash savings and investment.

As a first step in ISA reforms, investors will be able to access Long-Term Asset Funds in Stocks & Shares ISAs next year.

Meanwhile, the ring-fencing regime, which separates banks’ retail and investment banking activities, will be reformed, with the Economic Secretary to lead a review of how the changes can strike the right balance between growth and stability.

“Financial Services are a UK success story, and one of the eight sectors we identified with the biggest potential for growth in our modern Industrial Strategy,” stated Business Secretary, Jonathan Reynolds.

“This sector plan will help make the UK the number one destination for financial services by 2035 and is all about delivering on our Plan for Change to boost the economy and put more money in people’s pockets.”

Economic Secretary to the Treasury, Emma Reynolds, added: “Helping people take advantage of better returns from investing is key to better financial health, giving them a stake in a growing economy and connecting promising businesses with capital.

“These reforms will make the UK the best location for financial services firms and tear down barriers to investment to growing our economy and making families better off.”

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