Renewal leakage for insurance brokers and IFAs: what the FCA rules and review say

Author: Adam Khalid, Founder and CEO, Intel Made Simple. Sources last checked 28 October 2026.

Brokers and advisers earn most of their income from relationships that renew, not from one-off sales. That makes the renewal and the ongoing fee the two places where small failures repeat every year. A renewal that nobody diarised lapses quietly. An ongoing fee that is charged without the matching review is a conduct problem. A review that is delivered and never billed, where the client agreement provides for a fee, is a leak. This guide covers both sides for UK insurance brokers and independent financial advisers (IFAs).

It uses three primary sources: the FCA Handbook's rules on renewals, the FCA's review of ongoing financial advice services, and the Consumer Duty's definition of fair value. It is general information and not regulatory advice. Which rules apply to your firm depends on your permissions and the customers you serve, so check with your compliance lead.

What does ICOBS 6.5 require at renewal?

ICOBS 6.5 (opens in a new tab) applies when a firm proposes to a consumer the renewal of a general insurance contract that is not a group policy and has a duration of 10 months or more. In good time before the renewal, the firm must give the consumer the premium to be paid on renewal; a comparison figure shown consistently so it can be easily compared, which is the premium set at inception or, after mid-term changes, an annualised figure for the premium in effect after the most recent change; a statement that the consumer should check the level of cover is right for them and can compare prices and cover from other providers; and a statement of whether the contract renews automatically or the consumer must act.

Where the renewal will be the fourth or a later one, the firm must add the statement: “You have been with us a number of years. You may be able to get the insurance cover you want at a better price if you shop around.” The information must be given clearly and accurately, in writing or another durable medium, and in a way that draws the consumer's attention to it as key information.

ICOBS 6.5 is a consumer rule. A broker whose book is commercial clients will have a different set of obligations, and we do not set them out here. The leakage point is the same either way: a renewal that is not diarised, prepared and sent in good time is a renewal that may go elsewhere or lapse.

How do renewals leak?

In our reading, renewals leak at four points. The renewal is not diarised, so nobody prepares it. It is prepared late, so the client has no time to compare and shops elsewhere. It is sent without the required statements, which is a compliance gap as well as a service gap. Or it is agreed and the fee or commission for mid-term changes is never invoiced. None of these needs a large system to fix. They need a renewal calendar with owners.

Our suggested calendar for a small broker, which is a process and not a regulatory requirement: list every renewal date 90 days ahead; assign an owner at 90 days; send the renewal pack at no later than 30 days, or earlier if the market needs time; chase an unanswered renewal at 14 days; and record the outcome, renewed, moved or lapsed, in the same list. The record of outcomes is the leakage report.

Our arithmetic on invented figures shows why it is worth the effort. A broker has 400 policies at an average of £350 of annual income. If 6% lapse without anyone noticing in time, that is 24 policies and £8,400 of income a year. The figures are invented to show the method. Count your own lapses for one year before judging whether the problem is large.

What did the FCA find on ongoing advice reviews?

The FCA wrote on 15 February 2024 to 22 of the largest advice firms asking for data on delivery of ongoing advice over the previous seven years. Its page on ongoing financial advice services (opens in a new tab) says that, on the data provided, suitability reviews were delivered in around 83% of cases. In a further 15% of cases clients declined or did not respond to the offer of a review. In fewer than 2% of cases the firm had not attempted to conduct a review, which the FCA says will need to be put right. It did not view the issue as systemic at that point and said it would keep monitoring.

The page also records that firms can charge for ongoing services that include personal recommendations and related services, or related services alone, provided they relate to an earlier personal recommendation from the firm, and that about 80% of revenue from adviser charges relates to ongoing services from around 4 million clients. The services offered vary and are set out in individual client contracts, so the facts of each relationship matter.

How do ongoing fees leak, in both directions?

Read together, the FCA figures describe a two-way risk. Where fees are charged and no review happens, the firm has a conduct problem and a refund risk, which is a leak of a different shape. Where a review is delivered and a fee that the client agreement provides for is never charged, the firm has given work away. Both come from one cause: the fee ledger and the delivery log are kept in different places and nobody compares them.

Our monthly reconciliation takes an hour. Export the ongoing-fee ledger by client. Export the review log by client. For each client write one of four codes: fee charged and review delivered; fee charged and review pending with a booked date; fee charged and no review booked; review delivered and no fee charged. Only the first two are clean. The other two go to the responsible adviser with a date.

What does the Consumer Duty say about value at renewal?

PRIN 2A.4 (opens in a new tab) defines value as the relationship between the amount a retail customer pays for the product and the benefits they can reasonably expect to get, and says a product provides fair value where the amount paid is reasonable relative to the benefits. It requires a manufacturer to ensure its products provide fair value to retail customers in the target market and to carry out a value assessment and review it regularly. The manufacturer must be satisfied that fair value will hold for a reasonably foreseeable period, including, for a product that renews, following renewal.

The rules on manufacturers do not automatically describe a broker or an adviser, whose role may be distribution instead. We have not set out the distributor rules, so check with your compliance lead which role your firm holds. The leakage lesson holds in either case: a client who pays more each year for the same cover or service is a client who may ask what they are getting, and a firm with a clean fee-to-delivery record answers that quickly.

Where do AI tools fit, and what do they need?

A renewal calendar and a fee-to-delivery reconciliation are both well suited to automation, because they are list-matching tasks on structured data. They also use client data, which brings in the UK GDPR. Read our guide to UK GDPR and AI client data before client records go into any new tool. Our AI workflow automation service builds the export, the calendar and the reconciliation, and the pages for commercial insurance brokers and IFAs and wealth managers show the sector detail. The free Leak Scan is the cheapest first look, and the pricing page lists fixed fees.

What must a renewal notice contain under ICOBS 6.5?

For a consumer renewing a general insurance contract of 10 months or more that is not a group policy, the firm must give the renewal premium, a comparison with the previous premium, a statement to check the cover and compare alternatives, and a statement of whether the contract renews automatically. For a fourth or later renewal it must add the statement that the customer may get a better price if they shop around.

How often did advisers deliver ongoing reviews in the FCA's sample?

On the data from 22 of the largest advice firms, reviews were delivered in around 83% of cases, clients declined or did not respond in a further 15%, and the firm had not attempted a review in fewer than 2%.

What does fair value mean under the Consumer Duty?

PRIN 2A.4 defines value as the relationship between the amount a retail customer pays and the benefits they can reasonably expect, and a product provides fair value where the amount paid is reasonable relative to those benefits.

How can a small broker track renewals?

A renewal list with a 90-day lead, an owner, a send date and a recorded outcome is enough for most small books. The recorded outcomes, renewed, moved or lapsed, give you a lapse rate to act on.

How do you check ongoing fees against services delivered?

Match the fee ledger to the review log client by client each month and code each as clean, pending, charged with no review booked, or delivered with no fee. Send the last two to the responsible adviser with a date.