Dear CEO.....

The FCA have recently sent out a set of Dear CEO letters to Credit Brokers, Retail Finance Providers and Motor Finance Providers discussing the implementation of Consumer Duty in their respective sectors.

The letters reiterate the implementation timeline and sets out the FCA’s expectations for how they expect the Consumer Duty to be embedded in those specific markets, as well as giving some insight into how they plan to approach supervising the Duty.

I think by this point we’re all well aware that they Duty comes into effect for new and existing products at the end of July – what may have been a much-needed wake-up call to some firms is the reminder that they “should have completed all reviews necessary to meet the outcome rules” by the end of April. If your organisation is not already in in that position, you now have seven weeks to get there.

The new Consumer Duty rules require all businesses offering financial products to consumers to deliver good outcomes – acting in good faith, avoiding causing foreseeable harm and enabling customers to pursue their financial objectives. The new rules will also require firms to make sure their products and services are designed to meet the needs of specified target markets, that those products are priced to provide fair value, that the firm supports customers through the full product life cycle and that communications equip customers to make informed decisions.

In the abstract, the idea of new rules setting expectations around fair and just treatment of customers sounds simple – I believe almost all of us aim to act fairly and to do good work, so I can understand why some firms think they’re already doing all they need to. But when you look at all of those different points of assessment, and the need to be able to prove and document that good value is being offered, the scope of work required quickly becomes apparent.

If your business has not yet reviewed all aspects of your consumer offerings, Kind Consultancy can help. We work with a number of expert consultants who can act as a Critical Friend, whether you need a full assessment of work already done or you need an objective outsider to analyse what work you need to do.

As the FCA mention in their letters, the rise in cost of living and subsequent increase in the number of borrowers facing financial difficulty is going to make the provision of good value even more crucial than they expected when they were first drafting the new Consumer Duty rules. All the Financial Services sector is going to face close scrutiny in the months and years ahead and we can support you a number of ways, whether this is utilising our Critical Friend approach, delivering training, or simply additional resource to cover whilst you bring your firm up to speed.

For a confidential conversation, get in touch on 0121 643 2100 or [email protected]