Consumer Duty
Consumer Duty comes into effect on 31 st July 2023. It is a new standard established by the Financial Conduct Authority (FCA). It builds on the FCA’s earlier standards and principles, such as Treating Customers Fairly, by aiming to provide better protection for consumers in retail financial services by putting customers’ needs first. It sets higher expectations for the
standard of care customers receive from providers, through a four-pronged approach:
- Firms’ services and products are required to be fit for purpose and need to
offer fair value - Firms are required to help consumers make effective choices
- Firms will be subject to upgraded supervision, which will allow them to focus on preventing harm before it occurs – or to address it more quickly when it does happen
- A fair advice landscape that is more consumer-focused will be created, in which firms can compete and innovate while being focused on good consumer outcomes.
Products & Services
All products and services should be designed to meet the needs, characteristics and objectives of a target group of customers and distributed appropriately.
Price & Value
Firms should assess their products and services in the round to ensure there is a reasonable relationship between the price paid for a product and the overall benefit a consumer receives from it.
Consumer Understanding
Firms’ communication should support and enable consumers to make informed decisions about financial products and services. Consumers should be given the information they need, at the right time, and presented in a way they can understand.
Consumer Support
Firms should provide a level of support that meets consumers’ needs throughout their relationship with the firm. Firms’ customer service should enable consumers to realise the benefits of the products and services they buy and ensure they are supported when they want to pursue their financial objectives.
Timeline
The Consumer Duty will apply to new and existing products and services for sale or open to renewal from 31 st July 2023. For closed products and services, the Duty will apply from 31 st July 2024.
Related Documents
Target Market and Fair Value information documents: