As the FCA launches a multi-firm review into how firms handle bereavement, advisers face a simple question: will your bereavement journey stand up as a frontline test of Consumer Duty?
The Financial Conduct Authority confirmed this week that it will launch a multi-firm review into how firms handle bereavement, with work expected to begin later this year. Announced on 7 May at the Morningstar Investment Conference 2026 by Sara Woodroffe and Kate Tuckley, the message for advisers is direct: bereavement is no longer a quiet back-office function. It is becoming a visible, testable expression of how your firm delivers good outcomes under Consumer Duty.
The review will examine the processes firms have in place to support clients going through bereavement, the culture around those processes, and — crucially — whether they actually deliver good outcomes. It sits alongside a parallel push to speed up transfers, particularly for simpler products such as ISAs, and forms part of the FCA's broader work on customer vulnerability under the consumer duty.
For advisers, the practical question is what to do between now and the review's findings. The good news is that the underlying problems are already well understood, and the structural fix doesn't need to wait for a regulatory verdict.
For advice firms, the critical window is the period before the FCA publishes its findings. This is when firms can map their bereavement journeys, identify predictable failure points, and evidence that they are already acting on Consumer Duty expectations.
Three practical questions are worth answering now:
Firms that can answer ‘yes’ to those questions will be better prepared for both regulatory scrutiny and the commercial realities of client death.
The FCA's most recent Financial Lives data found that 49% of UK adults show at least one characteristic of financial vulnerability — poor health, a negative life event, low resilience, or low capacity.
Bereavement, almost uniquely, can trigger all four characteristics at once. A surviving spouse or adult child is grieving, exhausted, often dealing with their own health implications, and is being asked to make consequential financial decisions against tight deadlines and complex rules. That is precisely the moment when a firm’s processes are most exposed — and when it is least realistic to rely on clients to ‘self-serve’ their way to a good outcome.
Most bereavement journeys go wrong for the same underlying reason: nobody — sometimes not even the person who has died — had a complete, current picture of what they held, where it was held, and how to access it.
The executor begins by trying to work out what existed. They search through paperwork, emails, drawers and filing cabinets. They contact banks, insurers, pension providers and platforms one at a time. They wait for forms, return them, and wait again. Each institution has its own process, evidence requirements, and timelines. Months pass. Some assets are found late. Some are missed entirely.
The clearest recent illustration came from National Savings & Investments. In March, the Treasury-backed provider announced it would compensate estates after as many as 37,500 bereavement claims went unpaid, attributing the failure to a search process that did not identify all of a deceased customer’s NS&I products. The estimated total value of those unpaid claims was £476m.
Nearly half a billion pounds belonging to grieving families did not reach them — from a single provider — because the search could not reliably find what was there. For advisers, the same pattern shows up every day in quieter ways: a forgotten pension from a job three decades ago, a paid-up life policy nobody knew about, a workplace share scheme, an old ISA at a platform the family does not recognise. These are exactly the kinds of missed assets, delays and frustrations that the FCA’s bereavement review is likely to bring into the open.
For advisers, bereavement carries two distinct risks that are usually treated separately but in practice are the same problem.
The first is regulatory. The FCA's review is a clear signal that bereavement journeys will be scrutinised against the consumer duty in the same way as advice itself. Firms that treat bereavement as a back-office function, sitting outside the client relationship, are likely to find that position increasingly difficult to defend.
The second is commercial. Industry data consistently shows that practices lose the large majority of assets under management when the original client dies, because the relationship was only ever with that client and not with the family who inherits. Bereavement is therefore the moment at which the adviser's own business is most exposed — and it is exposed for the same reason the regulator is concerned. The family doesn't have the information, doesn't have the relationship, and doesn't see a reason to stay.
Both risks have the same root cause and the same solution. If firms only start trying to reconstruct a client’s financial life after they have died, families experience confusion and delay, the regulator sees poor outcomes, and inherited assets walk out of the door. If, instead, the complete financial picture, key relationships and wishes are captured and shared while the client is alive, bereavement becomes a moment to demonstrate value — not a point of failure.
The fundamental fix is structural rather than procedural. If a client’s financial life, key documents and instructions are organised and kept current during their lifetime, almost every failure point the FCA is concerned with becomes smaller.
When the structure is in place:
This is what ‘good’ looks like in a bereavement journey: fewer surprises, fewer delays, clearer accountability and a demonstrable reduction in harm.
This is the gap Lyfeguard is built to close. The platform brings a client’s documents, accounts, policies and wishes into a single secure place, with live connections to over 250 financial institutions so the picture stays current automatically. Trusted family members and the client’s adviser can be given controlled, permission-based access — now, on incapacity or after death — so the right people have the right information at the right time.
For advisers, that translates into:
In other words, Lyfeguard provides a structural foundation that reduces the risk of harm, protects inherited AUM and gives firms a defensible answer to the question the FCA is increasingly likely to ask.
The FCA’s review will run its course over the months ahead, and the findings will be worth close attention. But the underlying work does not depend on them. Practices that build a complete, current and sharable record of each client’s financial life now will be ready for whatever the FCA concludes — and will protect both their clients’ families and their own business in the process.
If you would like to benchmark your current bereavement journey against emerging FCA expectations, or see how Lyfeguard can provide the structural foundation described in this article, our team can walk you through a short, practical assessment tailored to your firm.
