The Consumer Duty is for life, not just for summer

      For those firms falling within the scope of the FCA's Consumer Duty, the 12 months leading up to the 31 July implementation deadline, will have involved a considerable amount of time and effort across many areas of their operations, in order to ensure they were ready in time.

      Some firms may have had to continue such work after the implementation date, where it proved impossible to complete everything in time and, in some cases, there may remain further actions that firms must carry out for their closed products before next July.

      Consumer Duty assurance

      In whatever way firms have reached where they are today, now is the time to take a pause and undertake an assurance review to assess whether the arrangements the firm has put in place as part of its Consumer Duty implementation plan are sufficient to meet its obligations under the Consumer Duty, on an ongoing basis. It is important to undertake such a review now if the firm is to avoid any failings becoming ‘baked in’ to its ‘business as usual’ operations. It will also assist in providing comfort to the Consumer Duty Champion and form a solid basis for the first governing body report.

      Questions firms might consider

      In conducting this review, firms may wish to consider how they would answer the following questions:

      • Is the firm’s assessment of which of its products and services fell within, and crucially, outside, the scope of the Duty, still valid?
      • How effective are the firm’s arrangements for identifying changes to existing products and services that might bring within the scope of the Duty those that were previously considered outside the scope?
      • How well-implemented is the new product or service approval process, in order that it may meet the requirements of the Consumer Duty?
      • How successful are the firm’s arrangements for demonstrating compliance with the cross-cutting obligations? Is the necessary evidence being recorded that may enable the firm to demonstrate positive compliance with these obligations? Are the necessary reports being generated and reviewed?
      • Have the assessments of value been carried out to an appropriate standard? Have there been any changes to any of the firm’s products and services following the performance of these assessments? If not, what might this mean?
      • How have the firm’s client communications, whether one-to-one or broadcast, changed under the firm’s new arrangements? Is there evidence of an improvement in the firm’s communications with regards to clarity and helpfulness?
      • Can the firm identify the improvements to the outcomes experienced by its customers in their dealings with the firm?
      • For firms that manufacture products, is the firm satisfied that it is providing its distributors with all appropriate information about the product? Does the interaction between the firm and its distributors demonstrate this?
      • For firms that distribute products, are they able to demonstrate that they have sufficient information from the product’s manufacturer to meet their own obligations?
      • For both manufacturers and distributors, how is the flow of information between the firms working?
      • For distributors of products manufactured overseas, are they receiving sufficient support from these manufacturers to enable them to meet their obligations? If not, what steps have been taken and how is this engagement progressing?
      • How well did the training, delivered across the firm, meet its objectives? What enhancements might be beneficial to the training programme going forward?
      • What does the firm’s implementation of the Duty tell you about its support for vulnerable customers? Does the MI on the number and type of vulnerable customers that the firm is supporting indicate that this aspect of the firm’s operations is functioning as expected?
      • Has the firm’s senior management remained appropriately engaged with each aspect of the firm’s arrangements for complying with its obligations under the Duty, or has the focus moved away, now that the implementation date has passed?

      These are just some of the questions that firms within the scope of the Duty might wish to consider, and individual firms will have further questions that are specific to their business model, products and services and customer base.

      How Waystone can help

      Waystone Compliance Solutions’ team of experts can help you to navigate through the complexities of the Consumer Duty regime and we are currently assisting firms with their Consumer Duty assurance reviews. If you would like to discuss how we can assist your firm, please reach out to your usual Waystone representative or contact us below:

      Contact us

      Previous post Next post

      More like this

      A legal precedent for sanctioned controllers?

      Mints v PJSC National Bank Trust Case
      Read more

      Regulatory Update: UK Edition – September 2023

      This UK regulatory update includes – FCA issues final rules on gateway for firms that approve financial promotions, The FCA…
      Read more

      Regulatory Update: UK Edition – Summer 2023

      This UK regulatory update includes – HM Treasury publishes outcome of Investment Research Review, FCA publishes results of Liquidity Management…
      Read more

      Compliance Update: Breakfast Briefing

      Come along to our complimentary Compliance Update: Breakfast Briefing in partnership with CCL Academy and hear from expert compliance professionals…
      Read more

      Regulatory Update: UK Edition – June 2023

      This UK regulatory update includes – FCA Quarterly Consultation No. 40, EU and UK sign Memorandum of understanding on regulatory…
      Read more

      FCA publishes findings from its Liquidity Management multi-firm review

      On July 6 2023, the Financial Conduct Authority (FCA) published findings from its Liquidity Management multi-firm review conducted on Authorised…
      Read more