Following on from the new Consumer Duty rules and guidance published by the FCA in July 2022 there is now less than six months to go before the Consumer Duty comes into force,
With this in mind, the FCA has recently published a review of how larger ‘fixed’ firms (with a dedicated supervision team at the FCA and who primarily operate in retail financial services markets) are planning to implement the Duty, with the aim of feeding back useful insights to help all firms understand the regulator's expectations.
The regulator reviewed a sample of implementation plans and found that many firms show they understand and embrace the shift to delivering good customer outcomes, which the Duty will bring, and have established extensive programmes of work to comply with it fully.
Some firms however are somewhat behind in their planning, so there is a risk that these may struggle to apply the Duty effectively once the rules come into force.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:
Given the scale of the reform, we recognise that some firms need to make significant changes. For firms which are further behind in making the necessary changes, there is ime to put that right and for them to show they are acting in the spirit of the new Duty.
Over the remaining six months of the implementation period, the FCA wants firms to particularly focus on the following:
Prioritising: Firms should make sure they are prioritising effectively, with a focus on the areas that will make the biggest impact on outcomes for consumers.
Making the changes needed: The FCA urges firms to ensure they are making the changes needed so consumers receive communications they can understand, and that products and services that meet their needs
Working with other firms: Firms need to share information and work closely with their commercial partners to make sure they are all delivering good customer outcomes.
A reminder that the rules come into force on 31 July 2023 for new and existing products or services that are open to sale or renewal, and 31 July 2024 for closed products or services.
Read the review here