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Consumer Duty Hub

Rightly or wrongly, the FCA believes there to be a general failure by authorised firms to provide retail consumers with products and services that meet their expectations. The Consumer Duty is the FCA's answer to the problem, with its stated aims of setting a higher expectation for the standard of care that firms give consumers.

The new Consumer Duty calls for a more proactive approach and ongoing focus on customer outcomes. While treating customers fairly has always been important, this Duty places additional responsibilities on firms. Boards must conduct annual assessments to determine if their firm is delivering good consumer outcomes in line with the Duty, and they must approve plans to rectify poor outcomes. Cementing the 'outcomes based' strategy set by the FCA in its 2022 Business Plan, the Consumer Duty is comprised of three key elements:

1. A new Principle for Business: the 'Consumer Principle' which requires firms to "act to deliver good outcomes for retail customers" 
 
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2. "Cross-cutting rules" setting out three overarching behavioural expectations that apply across all areas of firm conduct 
 
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3. "Four Outcomes", which are a suite of specific rules and guidance setting more detailed expectations for firms 
 
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All staff members (excluding ancillary staff) are expected to comply with the Consumer Principle and the cross-cutting rules, to the extent that is reasonable and proportionate to their roles. This means that every individual within the firm is accountable for ensuring fair treatment and positive outcomes for consumers.

The rules and guidance underpinning the Duty provide the FCA with expanded avenues for enforcement. This empowers the regulator to take appropriate action if firms fail to meet the requirements or fall short in delivering good consumer outcomes.

The Consumer Duty Hub, written by our team of experts, serves as a resource to all affected by the Consumer Duty in comprehending and implementing the necessary measures to fulfil the obligations mandated by the duty. We have created articles which apply to all firms and then sub-sector focused articles in the wealth management, consumer credit and insurance sub-sectors. You can access these below by clicking the relevant page.

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What matters to you

General
The Duty imposes a pro-active requirement, and firms will need to be 'ahead of the curve' if they are to avoid supervisory, or even enforcement action from the FCA. We are uniquely well placed with our combination of lawyers and regulatory consultants to help with any or all of your Consumer Duty needs. 
 
Insurance
The Duty introduces new rules and guidance aimed at ensuring that insurance products and services are designed to meet customer needs. Effective communication that supports consumer understanding and comprehensive support throughout the entire lifecycle of a product or service are also crucial aspects.
 
Wealth Management
The Consumer Duty sets higher expectations for asset and wealth managers to achieve positive outcomes for customers. This entails taking a proactive approach to delivering exceptional results and establishing individual accountability for both senior managers and staff at all levels. The duty introduces significant new requirements, with a particular focus on regulations related to price and value, which are likely to contribute to ongoing pressure on fees.
 
Asset Finance and Consumer Credit
The new Consumer Duty within the consumer credit sector calls for a more proactive approach and ongoing focus on customer outcomes. While treating customers fairly has always been important, this Duty places additional responsibilities on firms. Boards must conduct annual assessments to determine if their firm is delivering good consumer outcomes in line with the Duty, and they must approve plans to rectify poor outcomes.
 

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