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FCA Highlights Focus Areas For Firms Implementing Consumer Duty

Jan 25, 2023 4:53:48 PM

What has happened?

With six months to go before the Consumer Duty regulation comes into force, the FCA has published a multi-firm review of how firms are planning to implement the Duty.   

What are the key points of the review?

The FCA reviewed a sample of fixed portfolio firms’ implementation plans. In particular, they reviewed firms with a dedicated FCA supervision team that primarily operate in retail financial services markets. Fixed portfolio firms are among the largest firms supervised by the FCA and are firms with very large numbers of retail customers or are wholesale firms with a significant market presence.

The FCA found that many firms showed that they understand and embrace the shift to delivering good customer outcomes that Consumer Duty will bring. Additionally, firms have established extensive programmes of work to comply with it properly. However, the FCA also found that some firms are further behind in their planning, so there is a risk that they may struggle to apply the Consumer Duty regulation effectively once the rules come into force.  

Over the remaining six months of the implementation period, the FCA wants firms to particularly focus on:  

  • 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, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.

  • 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. The FCA has found that some firms need to accelerate this work to implement the duty on time.
The FCA will continue its work to support firms’ embedding activities in the run-up to the July 2023 implementation deadline for new and existing products and services. It will continue to engage with fixed portfolio firms where it has questions about their plans or approach, and to monitor the progress they are making in embedding the Duty. It will also be working with and supporting board champions at some larger firms. 

Additionally, the FCA will also soon be sending a survey to a sample of firms to help understand the progress they are making in implementing the Consumer Duty regulation and will carry out targeted engagement with smaller firms. 

How can we help you?

Thistle Initiatives has supported brokers for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as and when our team of specialists can serve as your right hand in a meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

We have provided expert advice, thought leadership, and training on topics such as treating customers fairly, financial promotions and vulnerable customer management for over 10 years. With cumulative experience of over 150 years across our team, we can assist your firm with the Consumer Duty through the provision of advice & guidance, policy templates, reviews of existing policies and readiness assessments to help ensure you are compliant by the deadline in July 2023.

If you want to discuss anything covered in this email, please contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.