On 27th July 2022, the FCA published its Policy Statement and Finalised Guidance on the new Consumer Duty. These final rules and guidance, which follow on from the FCA’s consultations in May and December 2021, “will set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.”
The rules include a new Consumer Principle requiring firms to act to deliver good outcomes for retail customers, three cross-cutting rules which clarify expectations firms must meet under the new Principle, and rules relating to four outcomes which aim to drive good customer outcomes.
Adempi Associates have put together a useful summary of the Consumer Duty here: https://www.adempi.co.uk/post/consumer-duty-broadening-the-scope-of-care-for-retail-customers
And CMS have created a Consumer Duty Toolkit to help impacted firms navigate the process of complying with the Duty: https://cms.law/en/gbr/publication/fca-consumer-duty-implementation-toolkit
Although the implementation date for new and existing products is the end of July 2023, firms’ boards or equivalent governing bodies will need to have reviewed and signed off on an implementation plan by the end of October 2022, and by the end of April 2023 product manufacturers will need to have completed reviews of existing products and shared the outcome of this review with their distributors to make sure the July implementation date is met.
The publication of the new Consumer Duty was followed closely by the FCA’s policy statement on strengthening financial promotion rules for high-risk investments and firms approving financial promotions (PS22/10) which also supports the approach of the Duty and the FCA’s strategy for improving outcomes for consumers of high-risk investments. Likewise, the key outcomes of the FCA’s policy statement on improvements to the Appointed Representative regime (PS22/11) are aligned with those of the Consumer Duty, and reinforce one another in terms of increasing protection for consumers dealing with Appointed Representatives.
Delivering good outcomes for retail investors is at the heart of what we do at ShareIn.