Dave title
27 Jun 2023
David Sharman our Quality and Compliance Manager explains the importance of Consumer Duty.

The Financial Conduct Authority is in the midst of arguably the biggest overhaul of their regulatory approach since the Retail Distribution Review in 2013. The new Consumer Duty for financial services is set to be introduced by the end of July 2023, which is now just a few weeks away.

The Consumer Duty marks a shift from a rules-based regulatory approach to one based on outcomes. It aims to, in the FCA’s own words, ensure companies “put themselves in customers’ shoes” when communicating and designing products.

The FCA’s Consumer Duty represents what the regulator terms a “paradigm shift” in its expectations of firms. It introduces a new Consumer Principle, which requires firms “to act to deliver good outcomes for retail customers”. In recognition of the barriers many consumers face, the FCA wants to see firms deliver a higher standard of customer care and protection, and to go further to equip consumers to make effective decisions in their interests.

The Consumer Duty comes into force from the 31st July 2023 for existing products and services, and seeks to ensure customers receive these 'good outcomes’ and that firms provide evidence that these outcomes are being met. It applies to 'all firms who determine or have a material influence over customer outcomes – not just those with a direct customer relationship.'

Proportionality is key when applying the new requirements. What works for one business may be very different to what works for another. One place to start for any size business should be putting themselves in their customers’ shoes, asking themselves questions such as ‘Am I treating my customers as I would expect to be treated in their circumstances?’ or, ’Are my customers getting the outcomes from my products and services that they would expect?’. If the answer across any product, process or outcome is ‘No’, corrective action needs to be undertaken.

The Duty forms part of the FCA's transformation to become a more assertive and data-led regulator. With firms assessing how they are meeting their customers’ needs, the FCA believe they will be able to quickly identify practices that do not deliver the right outcomes for consumers and take action before practices become entrenched as market norms.

The FCA have stressed, that the current economic climate means it is more important than ever that consumers are able to make good financial decisions. They want the financial services industry needs to give people the support and information that they need and to put their customers first.

The Key dates are: 
By the 30th October 2022 firms should have agreed their plans for implementing the Duty and be able to evidence they have scrutinised and challenged their plans to ensure they are deliverable and robust enough to meet the new standards.

By the 30th April 2023, manufacturers should have completed all of the reviews necessary, to meet the four outcome rules for their existing open products and services and have shared the information with their distributors to enable them to meet their obligations under the Consumer Duty.

By the 31st July 2023, the Consumer Duty will apply to all new products and services and all existing products and services that remain on sale or open for renewal; and 

By the 31st July 2024, the Consumer Duty will come fully into force and apply to all closed products and services

To find out more about The Consumer Duty, please contact us on [email protected]


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