UK FCA clarifies expectations on the consumer duty

The UK Financial Conduct Authority (FCA) has published a new webpage about the consumer duty. The webpage explains how the consumer principle is underpinned by three cross-cutting rules requiring firms to act in good faith, avoid foreseeable harm and support customers to pursue their financial objectives. The FCA reiterates the four core outcomes it expects firms to deliver, relating to the governance of products and services, price and value, consumer understanding and consumer support and expands upon its expectations of firms in ensuring them. Specifically, the FCA expects firms to ensure that products and services are fit for purpose and targeted appropriately, that pricing represents fair value relative to the benefits provided, communications are clear, fair and timely, and that customer support is accessible and effective throughout the product lifecycle.

While the FCA recognises that implementation may look different for smaller firms, it emphasises that all firms are expected to deliver the same standard of good consumer outcomes. In parallel, it updated its webpage on good practice and areas for improvement on the requirements for consumer duty board reports, adding specific guidance for smaller firms. The FCA recognises that these firms face different challenges and outlines suggestions relating to governance, monitoring and outcomes, actions taken to comply with the consumer duty and future business strategy, to help them meet the requirements. The FCA is open to considering more targeted work where it would be beneficial and it will continue to engage with the Smaller Business Practitioner Panel and other smaller firm stakeholders.

Return to main website.