The FCA 2025 RMAR Data and what this means for compliance

The FCA's latest Retail Mediation Activities Return (RMAR) provides another valuable insight into the changing shape of the UK intermediary market. Looking beyond the headline revenue figures, the 2025 data continues a trend that has become increasingly evident over recent years: there are fewer regulated firms, larger businesses are accounting for a greater proportion of market activity, and firms are operating under increasing operational and regulatory pressure.

For advisory businesses, growth is clearly still achievable. The challenge is whether firms can scale profitably when regulatory expectations, operational complexity and compliance costs continue to rise.

Revenue continues to grow despite market consolidation

The RMAR figures show strong revenue growth across all three major intermediary sectors.

At the same time, the number of regulated firms continues to fall:
- Investment firms: 4,683 to 4,406
- Mortgage firms: 3,955 to 3,854
- Protection firms: 9,447 to 8,921

This reinforces the FCA's ongoing focus on consolidation, supervisory oversight and operational resilience. Larger firms are managing greater volumes of clients, advisers and regulated activity, making effective governance increasingly dependent on accurate, timely management information rather than periodic manual reporting.

Growth does not automatically improve profitability

Although revenues have increased, margins remain under pressure.

Our research indicates that compliance now consumes approximately 20% of regulated firm revenues once staffing, monitoring, technology, regulatory reporting, training, external consultants and governance activities are taken into account.

Applying that benchmark to the RMAR data illustrates the scale of the challenge.

Collectively, this represents over £7.1 billion being spent annually on compliance activities across these regulated sectors.

For many firms, compliance costs continue to increase faster than operational efficiency. Hiring additional compliance staff every time the business grows is becoming increasingly difficult to justify, particularly as the FCA shifts towards more data-driven supervision.

The FCA increasingly expects evidence, not explanation

Recent Section 165 information requests, thematic reviews and supervisory activity demonstrate that regulators increasingly expect firms to produce high-quality data quickly.

Boards need access to information covering:

- Consumer Duty outcomes
- Adviser performance
- File quality and suitability
- Complaints and vulnerability
- Governance and risk indicators
- Operational resilience
- Training and competence
- AI and technology governance

Producing this manually is resource intensive and often results in historic rather than current management information.

The direction of travel is clear: firms need continuous visibility across their regulatory data rather than relying on periodic reporting exercises.

Technology is becoming a commercial necessity

The firms that are scaling most effectively are increasingly treating compliance as a data problem rather than simply a people problem.

Modern RegTech platforms allow firms to automate much of the evidence gathering, monitoring and reporting required across governance, risk and compliance.

Within Model Office, this includes:

- Automated firm and client file reviews
- Continuous Consumer Duty monitoring
- AI-assisted regulatory intelligence
- Training and competence dashboards
- Integrated governance, risk and compliance reporting
- Board-ready MI and regulatory dashboards
- Data analytics identifying trends, exceptions and emerging risks

Rather than expanding compliance teams in line with business growth, firms can leverage automation to improve consistency, strengthen audit trails and provide management with near real-time regulatory insight.

The next competitive advantage

The latest RMAR data tells a positive story about revenue growth across the intermediary market. However, it also highlights an increasingly important commercial reality.

As firms become larger and regulatory expectations continue to evolve, competitive advantage will depend less on generating additional revenue and more on how efficiently that revenue is governed.

For firms facing compliance costs approaching 20% of turnover, improving operational efficiency is no longer simply about reducing overheads. It is about building a scalable governance model that supports growth, delivers better management information and provides the evidence increasingly expected by the FCA.

In a market where revenues are growing but regulatory scrutiny is intensifying, firms that become data-driven will be better placed to protect margins while demonstrating good outcomes for both customers and regulators.

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