On the 27th July 2022, the Financial Conduct Authority announced new a Consumer Duty that will aim to ‘set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.’ (FCA.org.uk).
Consumer Duty aims to introduce new rules, comprising of:
- A new Consumer Principle that requires firms to act to deliver good outcomes for retail customers.
- Cross-cutting rules providing greater clarity on our expectations under the new Principle and helping firms interpret the four outcomes (see below).
- Rules relating to the four outcomes we want to see under the Consumer Duty. These represent key elements of the firm-consumer relationship which are instrumental in helping to drive good outcomes for customers.
These outcomes relate to:
- products and services
- price and value
- consumer understanding
- consumer support
The introduction of these rules require firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.
Further information about the FCA’s Consumer Duty guidelines, deadlines that firms must adhere to and what ongoing monitoring is expected are detailed on the FCA’s website which you can access through the below link.
Find out more on Consumer Duty