Consumer Duty

The FCA’s Consumer Duty sets a higher standard of care that firms should provide to consumers in retail financial markets. The rules came into force on 31 July 2023 for new and existing products and services. The next key milestone is 31 July 2024 for closed products. The Duty is expected to have far-reaching implications across financial services, with the FCA set to supervise against it. For some firms, it will continue to require a significant shift in culture and behaviours to meet the new, higher standard of conduct.

The overriding requirement in the Consumer Duty is that firms must act to deliver good outcomes for their customers, including those with characteristics of vulnerability. The Duty defines the standards of conduct that firms must follow to deliver good outcomes for their customers – firms must act in good faith towards customers, avoid causing foreseeable harm and enable and support their customers to pursue their financial objectives.

The firm’s board is responsible for assessing compliance with the Duty. Firms need to monitor and regularly review customer outcomes and act where they identify risks to compliance with the Duty. The rules and guidance identify ‘four outcomes’ which serve as the key measure for gauging whether firms are delivering good outcomes. These are concerned with whether the firm’s:

  • Products and services are designed to meet customers’ needs and are appropriately targeted.
  • Customers are receiving value for money.
  • Communication supports and enables understanding and informed decision-making.
  • Standard of support meets the needs of customers over the product lifecycle.

The Consumer Duty reflects a clear shift in the FCA’s regulatory approach from rules-based compliance to an outcomes-focused approach. The onus is on firms to monitor, assess, understand and evidence how they are acting to deliver good outcomes. Firms need to collect a broad range of data and information to give them the insights they need and produce management information to support compliance with the Duty. This aligns with the FCA’s own transformation to become more data-led, allowing for more timely market interventions.

How we can help

We have a dedicated team of conduct specialists to help firms to comply with the Consumer Duty. The team has extensive experience of helping firms to improve conduct, performing outcome assessments and giving independent assurance to Boards and Senior Managers.

We provide an independent viewpoint, review and make recommendations to build trust and confidence among key stakeholders so that a firm’s approach is geared to delivering good outcomes for customers. We can support in a number of areas including:

  • Strategy and culture (culture assessments, business model alignment).
  • Product governance (appropriateness of products and sales and marketing strategies, defined target markets, after sales monitoring and support).
  • Fair value assessments (balanced judgements of value offered by products and services).
  • Vulnerable customers (identification and continual monitoring).
  • Outcomes testing (back book review, remediation and structured programmes).
  • Training (Board, Senior Managers, and customer-facing teams).
  • Data and MI (evidencing outcomes, Board packs, demonstrating and evidencing compliance to FCA).

Get in touch

If you would like to speak with a member of our Financial Services team, please contact us or to submit Request for Proposal documents, use the link below.

Submit RFP

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