Consumer Duty implementation: good practice and areas for improvement

We have seen a flurry of activity from the FCA in recent weeks, perhaps one of the most significant for firms is the FCA's new webpage (published on 20 February) highlighting good practice and areas for improvement for firms, as identified in their early supervisory work, in relation to implementation of the Consumer Duty.

The findings have been grouped into six categories (the 4 outcomes, Culture & Governance and Vulnerable customers) where the FCA sets out the outcomes they are seeking and the examples of good practice and areas for improvement in those areas. The good practice examples and areas of improvement cover a wide variety of areas and raise some interesting points. In particular, around Board level involvement, expectations around MI, sharing information effectively across the distribution chain, ensuring products align with investor's risk profile and level of complexity, systems and controls and staff training. The examples cite particular markets or products, but firms of all sizes across the market will benefit from considering them.

Please click the link below to see our summary of the key highlights for good practice and areas of improvement.

Next Steps

• Benchmark and Reflect: Evaluate your firm's practices against the good practice examples. Celebrate wins and identify gaps (with a clear plans to address them or justify why no action is required).
• Continue to make improvements: the Duty isn't a mere compliance checkbox. It expects a fundamental shift in mindset and practices to be customer-outcome focused. The FCA's findings sheds light on both positive progress but also critical gaps in the implementation landscape so far. This should allow firms to continue to make improvements in line with good practice and continuously address issues that risk causing consumer harm.
• Stay Ahead: The 31 July 2024 deadline for closed products and services looms. Use the FCA's findings to fine-tune your approach to closed product implementation.