FCA Speech on the Consumer Duty – Key Takeaways
The key takeaways from the speech are as follows:
Innovation – one of the benefits of the Consumer Duty implementation exercise to both the industry and organisations is innovation. The implementation process will refine systems and ideas; data and outcome monitoring will bring forward technological advances; and, firms will radically improve their offering to the market.
Actions – firms need to take the following actions before the 31 July 2023 deadline:
- share information with commercial partners including distribution networks, retailers, and any third parties
- focus on the areas that will have the biggest impact on outcomes for customers
- narrow the target market and ensure it can understand the firm’s communications
- remove bad practices, sludge practices, punitive exit fees and unfair charges
- double check implementation plans to ensure they meet the requirements set out in the FCA’s rules and guidance.
Delivering the duty – the FCA has seen many examples of good practices in its review of implementation plans, these include:
- clear executive accountability for delivery and board oversight
- clear implementation plans, mapped into workstreams with key milestones
- scrutiny and challenge by the board, executives and audit and risk teams
- timely involvement of risk and compliance and internal audit teams
- clear arrangements for ongoing scrutiny of the organisation’s implementation work
- reviews of rewards and incentives to take the Duty into account.
Next Steps – the FCA is in the process of sending out industry-specific “Dear-CEO” letters. In addition, the FCA will be surveying around 600 smaller firms to check how prepared they feel with their implementation plans. Mr Mills concludes by reminding firms of the end of April milestone, when manufacturers will need to complete all reviews necessary to meet the four outcome rules and share information with distributors to help them to meet their obligations.
Waystone has prepared a comprehensive series of Regulatory Guides that will steer you through the complexity of the Consumer Duty. For more information about our advisory support, please contact us.