What is the Consumer Duty?
The FCA wants to make sure consumers are properly protected by every producer and distributor of financial services or products. That includes advisers like you, and companies like AJ Bell. To make sure we all know what’s expected of us, they’ve introduced the Consumer Duty.
These new rules aim to achieve good customer outcomes in the four key areas of ‘price and value’, ‘consumer understanding’, ‘products and services’, and ‘consumer support’.
How does this impact advisers?
By providing customers with good value for money, clear information when they need it, well-designed products or services and plenty of support after they’ve bought them, the Consumer Duty should mean a big improvement in consumer protection.
It also means you’ll need to review your entire customer journey, looking at everything from marketing materials and pricing, to staff training, governance and accountability. Fortunately, the Consumer Duty hub is here to help you out.
Products and services
The oversight and governance summaries in this section include details on our products’ target markets, key features and risks. You can use the summaries to support your compliance with the new Consumer Duty regulations.
Price and value
Firms need to demonstrate their approach to charging strikes a fair balance between the overall price customers will pay over their lifetime for a product or service, and the benefits they’re likely to receive.
When assessing the value of a service, the FCA suggests firms consider what it costs them to provide it, and the market rates for comparable services. To help you meet the regulator’s imminent deadlines, we’ve gathered the following practical guidance and support material.
We are working with Dr Richard Whittle to explain how behavioural economics and related approaches can help you achieve more positive outcomes for your clients.
Adviser firms have to tailor their approach according to the needs of different customer groups – including those who may be classed as ‘vulnerable’. Firms should also consider how they manage and monitor complaints, and carry out root cause analysis.
Consumer Duty toolkit
These resources will help you demonstrate that your firm puts clients at the heart of your business, and offers products and services that are both fit-for-purpose and fair value.
Implications for the retail wealth management supply chain
FCA’s policy statement
FCA’s Consumer Duty page
FCA’s finalised guidance
How the FCA’s default investment options will affect advisers and providers
Rules and regulations falling short on consumer understanding
Consumer Duty – a deep dive into consumer understanding
RegionNorthumberland - NorthScotland and Northern Ireland
RegionNorth EastNorthumberland - South