The final countdown to the new Consumer Duty

It's the final countdown to the new Consumer Duty. After what feels like a lifetime of consultations, responses and commentary on the FCAs new Consumer Duty, the final countdown is upon us. With just over 5 months to go before the Consumer Duty comes into force, the big question is... Are you ready?

After reviewing a sample of implementation plans, the FCA praised a number of firms for their hard work in embedding the Duty, however, they raised concern that some firms have been operating under the assumption that the new Duty is a “re-expression of Treating Customers Fairly (TCF)” and some firms are “over-confident that their existing policies and processes will be adequate”. This is not the case, change is required. Are you ready?

Firms need to make fundamental cultural changes, led from the top, to ensure the best client outcomes. The onus is on firms to document their processes that deal with the mitigation of foreseeable client problems. Evidence is the key; capturing good practice, logging the evidence that you are putting you client’s best interests first, evidence at all levels and in all processes.

The FCA have indicated areas firms need to focus on over the coming months to ensure they apply the Duty by the 31st July 2023 deadline.

  • Prioritise reducing the risk of poor outcomes, including an assessment to capture situations where their practices are falling short of all the Duty’s requirements
  • Communicate and collaborate with distributors in their chain – this is a critical step to ensure good outcomes – we are seeing both manufacturers and distributors having limited discussion at this stage which will clearly increase pressure as time for implementation runs out
  • Embed timelines for reviews and provide evidence that the new duty is part of the firms culture and forward-looking approach

These can be achieved by:

  • Keeping records of all governance and oversight decisions, evidencing all decisions made (e.g. resourcing) to deliver your firms implementation plan.
  • Ensure there are records of risk assessments associated with the implementation plan and a timeline for continuing these beyond the deadline.
  • Making Consumer Duty a standing agenda item, to be scrutinised on an ongoing basis and again, providing evidence of this.
  • Evidence the lengths you are going to now, to ensure you meet the July deadline. Identify any shortfalls, prioritise areas where there is a high risk of consumer harm and ensure you have a Plan B in case dependencies with third parties fail.
  • If you operate in a distribution chain, you should already be speaking with the other firms in your chain (and again provide evidence of this). Manufacturers are required to complete their Consumer Duty reviews and share information with distributors by the end of April 2023.
  • Ensure you are focusing on the four Consumer Duty outcomes and make the required changes to products, communications, systems and processes – and again evidence the details of these changes for your records.
  • Review your internal policies and training materials to ensure their cultural focus is on delivering good customer outcomes.
  • Scrutinise your current data and management information – what does this tell you now?  Will this be sufficient to monitor and demonstrate compliance with Consumer Duty?  Systems changes to collect more, or different data can take time so it is critical that these systems changes are not left until the last minute. 

Firms should ensure they keep up to date with the FCA as support is being provided in the form of sector specific letters (covering key expectations and risks), and a series of regional in-person events for specific groups of small and medium-sized firms.

You need to act now to ensure you are ready by the 31st July 2023.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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