# Consumer Duty fair value assessment: adviser template

> PRIN 2A.4.8R's four factors, what a financial adviser owes as a distributor, when to review, and a fair value assessment template to adapt.

Guide · Advice firms · By Syed Husnain Khalid · Published 8 October 2026 · Last checked 8 October 2026
Drafted with AI. Each claim was checked against the primary sources listed below by AI on 8 October 2026; a person has not reviewed it yet.
Canonical: https://vexralabs.com/insights/consumer-duty-fair-value-assessment

Short answer

A fair value assessment is a firm’s record showing that the price a retail customer pays is reasonable relative to the benefits they receive. PRIN 2A.4.8R sets **four factors**a manufacturer’s assessment must consider, PRIN 2A.4.3R requires it before a product is marketed or distributed, a distributor checks its own arrangements under PRIN 2A.4.16R, and no format is prescribed.

This guide is for UK advice firms and the compliance leads who support them, and who need a fair value assessment they can show the FCA. The FCA’s price and value update of 10 July 2026 calls assessments written after the event poor practice, and its focus areas page, updated 24 September 2026, lists expectations for wealth and advice firms when assessing fair value.

Building Filyst, our case management product for immigration firms, we made the audit log record each action when it happens, so a decision is recorded at the time, not reconstructed later. The sections below cover the definition, who owes one, the four factors, the adviser’s own part, timing, action, format and the template.

**Diagram: The fair value assessment cycle for an advice firm.** Before anything is sold the firm assesses value: PRIN 2A.4.3R requires an initial assessment before a product or significant adaptation is marketed or distributed. The firm then records the assessment and keeps it so the FCA can ask for it. Before distributing, PRIN 2A.4.16R requires the distribution arrangements to be consistent with fair value. PRIN 2A.4.24R requires regular review through the life of the product, including of the distribution arrangements so they stay that way. If fair value is lost, PRIN 2A.4.27R requires the firm to mitigate, redress and tell the rest of the chain.

*Each step has its own provision, so the document below names the rule behind every section.*

## What is a fair value assessment?

A fair value assessment is the analysis a firm keeps to decide whether a product provides fair value, which PRIN 2A.4.1R defines as the amount paid being reasonable relative to the benefits the product gives. PRIN 2A.4 mostly calls it a value assessment, and a “fair value assessment” in PRIN 2A.4.19R; FG22/5 and FCA pages use “fair value assessment”.

Value is judged in the round. FG22/5 7.3 says the price must be reasonable compared with the overall benefits, that low prices do not always mean fair value, and that a product meeting none of the customer’s needs is unlikely to offer fair value whatever it costs (FG22/5 7.5). The definition covers services as well as products (PRIN 2A.1.4G), and a retail customer includes a prospective customer (PRIN 2A.1.5G).

The document has to exist because FG22/5 7.47 expects firms to be able to clearly demonstrate how a product provides fair value, and 7.48 expects them to record the factors considered and provide evidence on request. An assessment with no conclusion does not do that.

## Who must carry one out?

Two roles owe different exercises: a manufacturer must carry out a value assessment and review it regularly (PRIN 2A.4.2R), and a distributor must not distribute a product unless its distribution arrangements are consistent with it providing fair value (PRIN 2A.4.16R(1)). An advice firm usually has two roles. It distributes other firms’ products, and it designs and prices its own advice service, so it assesses whether its own advice charges are fair value and whether the overall cost to the client, including every product and distribution charge in the chain, is reasonable for the expected benefits (FG22/5 examples after 2.20 and at 7.33; FG22/5 7.34).

The scope provisions fix who that covers:

- **Retail market business:** the Duty applies to it, including existing products and closed products (PRIN 3.2.6R(1), read with the application chapter at [PRIN 3.2](https://www.handbook.fca.org.uk/handbook/PRIN/3/2.html)).
- **Distribution chain:** the Duty applies only to the extent the person is responsible for determining or materially influencing retail customer outcomes (PRIN 3.2.7R).
- **Co-manufacturer:** a firm distributing to other firms must consider whether it also co-manufactures, in which case the manufacturer rules apply to it (PRIN 2A.4.18R(3)).
- **Exclusions:** non-investment and legacy non-investment insurance, funeral plan products subject to PROD 7, and authorised fund managers for the listed COLL rules (PRIN 2A.4.32R(1)(a) to (c); PRIN 2A.4.33R for units being wound up).
- **No cost, no assessment:** where a product has neither a financial cost nor a non-financial cost for the consumer, such as debt advice funded from another source, the FCA does not expect a value assessment (FG22/5 7.20).

## What must it consider?

PRIN 2A.4.8R lists four factors a manufacturer’s assessment must include, and the rule says the list is not limited to them. Four further factors sit in guidance at PRIN 2A.4.9G, and FG22/5 7.10 lists factors firms may consider, which the FCA may also look at.

| Factor the rule requires | What an advice firm records | Provision |
| --- | --- | --- |
| Nature of the product, including the benefits it provides or may reasonably be expected to provide, and its quality | What the client gets for the money: the service delivered, its standard, and what the adviser does for it | PRIN 2A.4.8R(1) |
| Any limitations that are part of the product | Restrictions, exclusions, notice periods and what leaving the product costs, because unreasonable exit charges are unlikely to be fair value | PRIN 2A.4.8R(2); FG22/5 7.30 |
| The expected total price: (a) the price paid on entering the contract, including repayments; (b) regular charges or fees over the lifetime of the product; (c) contingent fees, such as arrears, address-change or transfer charges; (d) any non-financial costs the customer must provide | Every charge in one total, plus the time and effort needed to buy, amend, switch or cancel, and the personal data given to the firm | PRIN 2A.4.8R(3)(a) to (d); PRIN 2A.4.10G(2); FG22/5 7.28 |
| Characteristics of vulnerability that customers in the target market display, and their impact on the likelihood of receiving fair value | Whether any group in the target market is less likely to get fair value, including where different prices are charged to different groups | PRIN 2A.4.8R(4); PRIN 2A.4.11G |

PRIN 2A.4.9G says a firm may consider four more things: its own costs of manufacturing or distributing the product, the market rate and charges for a comparable product, any accrued costs or benefits on an existing or closed product, and whether products priced significantly lower give a similar or better benefit. FG22/5 7.10 adds whether the product is a significant outlier against comparable products.

Two of those need spelling out for advice work. Non-financial costs are the time and effort it takes to access, assess, buy, amend, switch or cancel, and the data a customer knowingly or unknowingly trades for the service (FG22/5 7.28). Limitations reach exit rights: the FCA expects exit charges to be fair and to reflect the underlying cost of ending the contract (FG22/5 7.30).

FG22/5 7.19 allows grouping similar products where the customer base, complexity and risk of harm are sufficiently similar. The FCA’s 10 July 2026 update adds that two products with significantly different features or separate target markets need separate fair value assessments.

## What does a financial adviser add as a distributor?

An advice firm does not repeat the manufacturer’s assessment of the product, but it does assess its own charges. PS22/9 says firms are not required to duplicate value assessments and are responsible only for the prices they control; FG22/5 7.31 puts the same duty on distributors for their own charges.

PS22/9 states the position in its response at 7.9: “Firms are not required to duplicate value assessments. Firms are responsible only for the prices that they control and are not required to re-do or challenge other firm’s value assessments.” PRIN 2A.4.16R(2) says the arrangements are consistent with fair value where they let the distributor get enough information from the manufacturer to understand the outcome of the value assessment and, in particular, to identify:

- the benefits the product is intended to provide to a retail customer;
- the characteristics, objectives and needs of the target market;
- the interaction between the price paid by the retail customer and the extent and quality of any services provided by the distributor; and
- whether the distribution arrangements, including remuneration it, or so far as it is aware another person in the chain, receives, would result in the product ceasing to provide fair value.

FG22/5 7.32 requires the distributor to obtain that information from the manufacturer, and 7.33 explains why the last item matters: fees added by different firms in the chain can together produce a total that is not fair value, which is most relevant in long or complex chains. FG22/5 7.34 gives the adviser-specific duty in one line: a financial adviser must recommend a proposition that is fair value for the customer.

Where the manufacturer sets the final price, including distribution charges paid as commission, the distributor does not carry out a value assessment, but must confirm the manufacturer has carried out one and review the information shared before distributing (FG22/5 7.35). PRIN 2A.4.19R(2) adds that the distributor considers the assessment when determining the distribution strategy, including where products are sold as a package, and PRIN 2A.4.20R forbids relying on individual retail customers’ views about value in place of the firm’s own assessment.

The wider duties that software carries in an advice firm sit in the hub’s pillar guide, [AI software for financial advisers under Consumer Duty](https://vexralabs.com/insights/software-ai-advice-firms).

## When must it be done and reviewed?

PRIN 2A.4.3R requires an initial value assessment before a product or significant adaptation is marketed or distributed, PRIN 2A.4.19R requires it at each approval stage and when the distribution strategy is set, and PRIN 2A.4.24R requires regular review through the life of the product.

| Moment | What the firm does | Provision |
| --- | --- | --- |
| Before a product or significant adaptation is marketed or distributed | Carries out the initial value assessment | PRIN 2A.4.3R |
| At design, target-market and distribution-channel decisions | Considers the assessment at each stage of product approval | PRIN 2A.4.19R(1) |
| When the distribution strategy is set, including packaged products | Considers the assessment as a distributor | PRIN 2A.4.19R(2) |
| Regularly through the life of the product | Reviews the assessment, or the distribution arrangements; the factors that set how often may include nature and complexity, indicators of customer harm, distribution strategy and external factors | PRIN 2A.4.2R(2); PRIN 2A.4.24R; FG22/5 7.46 |
| On a material change or emerging risk | Should update the assessment (an FCA expectation, not a rule) | FCA, price and value good and poor practice, 10 July 2026 |

The rules came into force in two phases: 31 July 2023 for products and services open to sale or renewal, and 31 July 2024 for closed products and services (PS22/9 1.57). From then on the duty is continuous rather than annual by default, because FG22/5 7.46 tells firms to decide the frequency from relevant factors, which may include the product and the evidence of harm, not from the calendar.

The monitoring that tells a firm when a review is due comes from the same evidence base as the rest of the Duty: [Consumer Duty outcomes: the evidence advice firms need](https://vexralabs.com/insights/consumer-duty-evidence) sets out what PRIN 2A.9 monitoring must determine.

## What happens if it finds poor value?

PRIN 2A.4.25R obliges a manufacturer to take appropriate action to mitigate and remediate harm to existing customers and prevent harm to new ones; PRIN 2A.4.27R obliges a distributor to mitigate the situation and prevent further harm, including amending its distribution strategy where appropriate, redress foreseeable harm caused by its own arrangements, and inform the rest of the chain promptly.

FG22/5 7.14 names the usual options, amending the product to improve its value or withdrawing it from sale, and PRIN 2A.4.26R requires the manufacturer to notify distributors of the issue and of the changes made. On closed products and products held before 31 July 2023, appropriate action does not require the firm to waive vested contractual rights such as payments already due or contractual charges on early termination, unless the firm has found a breach of rules in existence before that date (PRIN 2A.4.29R, PRIN 2A.4.30G).

The FCA’s 10 July 2026 update ties this to PRIN 2A.9.12R and PRIN 2A.4.25R: firms must take action where customers are not receiving fair value, or where one group gets a worse outcome than another for the same product. In the approaches it called effective, firms set out the nature and scale of the concern, which groups were affected, the rationale for the action, and the metrics used to test whether it improved outcomes.

The same page gives poor practice from the wealth sector: firms applied multiple charges to a single client account without clarifying what each charge related to, and their fair value assessments did not adequately identify the risk of customers paying more than once. The FCA’s priorities page, updated 24 September 2026, lists [“Expectations for wealth and advice firms when assessing fair value”](https://www.fca.org.uk/publications/corporate-documents/consumer-duty-focus-areas) as a focus of its continuing engagement with consumer investment firms.

## What format must the document have?

No format is prescribed. FG22/5 11.26 says there is no prescribed format for evidencing monitoring, but the FCA expects firms to keep records that can be provided to it on request, and FG22/5 7.47 expects firms to be able to show clearly how a product provides fair value.

The FCA’s examples are exactly that: its 10 July 2026 update says they “do not create new regulatory requirements, and firms are not expected to adopt every example”. The same page allows a proportionate approach, where firms with simpler products or business models may use less complex processes and more readily available information, while stressing that firms are still expected to carry out sufficiently robust assessments.

Two findings show the limits of copying someone else’s document. The FCA’s review of fair value frameworks, published on 10 May 2023, records, as an area for improvement, firms that used a single generalised template across very different products without showing how it applied to each, and notes that points-based or red, amber and green ratings appeared appropriate in many circumstances, while suggesting firms consider how the thresholds between ratings are drawn.

How long the record is kept follows the usual rules: the [financial adviser record keeping obligations](https://vexralabs.com/insights/record-keeping-financial-advisers) set the periods, and FG22/5 7.47 points firms at SYSC when deciding what to maintain.

The rules above say what an assessment must decide, not what the document looks like. The template below turns each provision into a section you fill in, so a reviewer can see the rule behind every answer. What we build for advice firms is set out on [software for financial advisers](https://vexralabs.com/financial-advisers).

## Fair value assessment template

This is a starting point to adapt, not a form the FCA has approved or reviewed. Replace every bracket, delete what does not apply, and keep the provision references so anyone reading it later can check the rule behind the answer.

### 1. Product, firm and role

[Product or service] · Manufacturer: [name] · Our role: [manufacturer of our advice service; distributor of [products]; co-manufacturer if PRIN 2A.4.18R(3) applies] · Date of assessment: [date] · Assessed by: [name and role] · Next review: [date or trigger]

### 2. Target market

[Characteristics, objectives and needs of the customers the product is designed for (PRIN 2A.4.16R(2)(b)).] [Groups within it, including customers with characteristics of vulnerability.]

### 3. Benefits and limitations

[What the customer can reasonably expect to receive, and the quality of it (PRIN 2A.4.8R(1)).] [Limitations that are part of the product: restrictions, exclusions, notice periods, and the charge for leaving (PRIN 2A.4.8R(2); FG22/5 7.30).]

### 4. Expected total price

[Price paid on entering the contract, including repayments (PRIN 2A.4.8R(3)(a)).] [Regular charges and fees over the lifetime of the relationship, such as an annual management charge (PRIN 2A.4.8R(3)(b)).] [Contingent charges: administration changes, arrears, transfers (PRIN 2A.4.8R(3)(c)).] [Non-financial costs: time and effort to buy, amend, switch or cancel, and the personal data provided (PRIN 2A.4.8R(3)(d); FG22/5 7.28).] [Remuneration added by anyone in the distribution chain, and its cumulative effect (PRIN 2A.4.16R(2)(d); FG22/5 7.33).]

### 5. Comparison

[Market rate and charges for comparable products, and whether ours is an outlier (PRIN 2A.4.9G(2); FG22/5 7.10).] [Our own costs of delivering the service (PRIN 2A.4.9G(1)).] [Products priced significantly lower for a similar or better benefit (PRIN 2A.4.9G(4)).] [Accrued costs or benefits on existing or closed products (PRIN 2A.4.9G(3)).]

### 6. Customer groups and vulnerability

[Whether each group receives fair value, including where different prices are charged to different groups (PRIN 2A.4.11G).] [Whether characteristics of vulnerability make fair value less likely (PRIN 2A.4.8R(4)).] [Any differential outcome, with the Equality Act 2010 position considered (FG22/5 7.43).]

### 7. Conclusion and action

[Fair value: yes or no, with the reasons in one paragraph.] [If no: the action, the owner, the date, and how the effect on outcomes will be measured (PRIN 2A.4.25R, or PRIN 2A.4.27R for a distributor).] [Who in the chain was informed, and when (PRIN 2A.4.26R, PRIN 2A.4.27R(3)).]

### 8. Evidence and review

[Data and management information used, and how far it shows the assessment stays valid (FG22/5 7.48).] [Where the record is kept, and for how long, under the firm’s SYSC record-keeping policy.] [Next review date, set by the nature and complexity of the product, indicators of customer harm, the distribution strategy and external factors (FG22/5 7.46).] [Approved by: [governing body or committee], on [date].]

Not legal advice

This guide and template are built from PRIN 2A.4, PRIN 3.2, FG22/5 Chapters 2, 7 and 11, PS22/9 and the FCA’s good and poor practice pages as read on the date checked. The template is a starting point to adapt. Check it against the FCA’s current rules and your own compliance adviser before you rely on it.

## Frequently asked questions

### Does the FCA publish a fair value assessment template?

No. None of the FCA's rules, guidance or good and poor practice pages cited here contains a fair value assessment template, and FG22/5 11.26 says there is no prescribed format for evidencing monitoring, as long as the records can be provided to the FCA on request.

### How often must a fair value assessment be reviewed?

There is no fixed interval. PRIN 2A.4.2R(2) and 2A.4.24R require regular review, on a basis appropriate to the nature and duration of the product, and FG22/5 7.46 says the factors may include the nature and complexity of the product, indicators of customer harm, the distribution strategy and external factors.

### Must a financial adviser repeat the manufacturer's value assessment?

No. PS22/9, in its response at 7.9, says firms are not required to duplicate value assessments and are responsible only for the prices they control, while FG22/5 7.31 requires distributors to assess their own charges for fair value.

### Do small advice firms need the same document as a large firm?

The FCA's 10 July 2026 update allows a proportionate approach, so a smaller firm may use a simpler process with readily available information, but it still expects a sufficiently robust assessment that shows why the price is reasonable.

### Is the fair value assessment changing?

PRIN 2A.4 was unchanged as checked on 8 October 2026. CP26/23 consulted on the Duty's scope and proportionality from 29 June to 18 September 2026, and the FCA expects a policy statement and any new rules in Q1 2027. Among other things it proposes to make clear when and how firms in a distribution chain can rely on each other.

## Sources

1. [FCA Handbook, PRIN 2A.4 Consumer Duty: retail customer outcome on price and value (last updated 9 December 2025)](https://www.handbook.fca.org.uk/handbook/PRIN/2A/4.html)
2. [FCA Handbook, PRIN 2A.1 Application and purpose (PRIN 2A.1.4G and 2A.1.5G)](https://www.handbook.fca.org.uk/handbook/PRIN/2A/1.html)
3. [FCA Handbook, PRIN 3.2 The scope of the Consumer Duty application (last updated 26 June 2026)](https://www.handbook.fca.org.uk/handbook/PRIN/3/2.html)
4. [FCA, FG22/5 Final non-Handbook Guidance for firms on the Consumer Duty, Chapters 2, 7 and 11 (July 2022, PDF)](https://www.fca.org.uk/publication/finalised-guidance/fg22-5.pdf)
5. [FCA, PS22/9 A new Consumer Duty: Feedback to CP21/36 and final rules (July 2022, PDF)](https://www.fca.org.uk/publication/policy/ps22-9.pdf)
6. [FCA, Price and Value Outcome: Good and Poor Practice (published 16 September 2024, last updated 10 July 2026)](https://www.fca.org.uk/publications/good-and-poor-practice/price-value-outcome-good-poor-practice-update)
7. [FCA, Consumer Duty: Findings from our review of fair value frameworks (first published 10 May 2023; no content change since)](https://www.fca.org.uk/publications/good-and-poor-practice/consumer-duty-findings-our-review-fair-value-frameworks)
8. [FCA, Our Consumer Duty focus areas (last updated 24 September 2026)](https://www.fca.org.uk/publications/corporate-documents/consumer-duty-focus-areas)
9. [FCA, CP26/23 Consumer Duty: scope and proportionality (first published 29 June 2026, consultation closed 18 September 2026)](https://www.fca.org.uk/publications/consultation-papers/cp26-23-consumer-duty-scope-and-proportionality)