The FCA's proposals for a new Consumer Duty amount to a major package of reform with far-reaching consequences across the financial services sector.
The impact of the new Duty will vary across firms, and across products and services. Aspects of the new Duty will apply to firms without any direct contractual relationship with retail customers, but in all settings it is intended to raise standards. By the FCA's own estimate, implementation costs to industry could be as high as £2.4bn. For many firms, implementing the new Duty will require changes to firm governance, rethinking customer service and developing new systems and processes, for example to embed fair value frameworks.
Given the wide-ranging and in many cases complex issues which the new Duty raises across the industry, our team of financial regulation, risk and compliance experts have created several resources covering key aspects of the new regime and providing practical guidance to help you prepare.
We also have assembled a Toolkit to assist firms to meet the FCA’s expectations around the approval of an implementation plan by 31 October.
“These proposals are part of the FCA’s broader push to ensure that firms are proactively doing the ‘right thing’ for customers. Although it will take time to see the effect of these proposals on the market, it is clear at this stage that firms will need to undertake a thorough review of their current approach to retail customers.” Jonathan Herbst, Global Head of Financial Services, London
Resources to help you prepare
The Consumer Duty: What should firms be doing now?
In the latest of our ‘New Consumer Duty Series’, members of our Financial Services and Risk Advisory teams will share their insights on the key actions firms should already have under way, and those which are to come as part of their preparations for July 2023.
The Consumer Duty series: Post-Implementation Plan approval - Key issues for firms
In this episode, following the FCA’s interim 31st October deadline, Jonathan Herbst, Matthew Gregory, Joe Bamford and Iain Hawthorn focus on where firm’s should be now, and the key things they need to consider in taking forward their implementation plans for the new Consumer Duty. The discussion includes the steps that firms need to take over the next few months and the challenges that they will face throughout the implementation period.
FCA Consumer Duty for Insurance
In July this year the FCA published its Policy Statement (PS 22/9) A New Consumer Duty (the Consumer Duty). The FCA is clear that the Consumer Duty will have a significant impact on how firms interact with what it describes as retail customers and that it will set higher expectations for the standard of care firms give to them over the lifecycle of their products.
Consumer empowerment through the new UK Consumer Duty: Will Australia follow suit?
On 27 July 2022, the UK Financial Conduct Authority (FCA) published its eagerly awaited Policy Statement 22/9 ‘A New Consumer Duty – Feedback to CP21/36 and Final Rules’ (PS22/9), which represents one of the largest pieces of regulatory reform in the UK retail financial services sector for more than a decade.
The Consumer Duty series: Implementation planning
In this episode, Jonathan Herbst, Matthew Gregory and Iain Hawthorn focus on the fast-approaching 31st October deadline for firms’ management bodies to have approved the implementation plan for the new Consumer Duty.
The FCA’s Consumer Duty: New milestones for firms ahead of implementation
The FCA has opted for a two stage implementation of its new Consumer Duty regime.
The Consumer Duty series: Key takeaways from the FCA’s policy statement
In the latest episode of our Consumer Duty series, Joe Bamford and Iain Hawthorn unpack the key takeaways from the FCA’s policy statement and finalised non-handbook guidance published on 27 July 2022 and summarise immediate next steps for firms.
The Consumer Duty series: The consumer understanding outcome
In our second episode of our series focusing on the FCA’s new Consumer Duty, Matt Gregory is joined by Iain Hawthorn who explore the consumer understanding outcome, what it hopes to achieve and some practical considerations for firms ahead of implementation.
The Consumer Duty series: Impact on the distribution chain
In the first episode of our series focusing on the FCA’s new Consumer Duty, Matt Gregory is joined by Haney Saadah and Joe Bamford who consider some of the practical issues which firms across the distribution chain will need to resolve in order to achieve the new ‘products and services outcome’.