A Practical Guide to the FCA Consumer Duty
After years of debate, preparation and dare I say indecision, the Consumer Duty has now fully landed. The final implementation date passed in July 2024, with the completion of Closed Product Reviews as well as the Board Report.
It's tempting to consider the duty 'done and dusted' and move back to BAU. However, that's clearly not the case.
The duty is not a 'once and done' type of requirement, the product governance framework is designed to continuously assess the quality of products and services, including their benefits and harms, meaning the duty must become a way of life.
Furthermore, there are ongoing formal requirements such as outcomes monitoring, regular product reviews and value assessments. Such assessments may be triggered by several events, firms are therefore required to have a system in place to identify changes (economic, political, etc.) which could result in the product posing a risk to customers or fundamentally change the nature of its intended benefit.
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Another reason the duty is not a one and done requirement is the regular feedback from the regulator, the FCA has been quite pro-active in reviewing the approaches taken by firms and providing their views. Compliance professionals must keep across this detail, adjusting their duty framework as and when needed. The updates are usually shared here: Consumer Duty | FCA.
There is a lot to do to keep on top of the duty, but not having the right foundational understanding of the requirements to start with makes it far more difficult. My book "A Practical Guide to the FCA's Consumer Duty" gives you that foundation, the book takes the reader through the duty from start to finish, answering the difficult questions and giving genuine practical tips for compliance with the duty.
Robert Bell - About half way through the book, having spent some time on the Product Governance Framework and Fair Value chapters. As a director of a trade body (DEBT MANAGERS STANDARDS ASSOCIATION LIMITED), you are always trying to look at this through the lens of a consumer and a member firm. The book is a snapshot in time (May 2024) and regulatory expectations continue to emerge at a more granular level. The FCA has just published its regulatory grid for the next 2 quarters, which includes focus on customers with characteristics of vulnerability. Before and after the 31 July 2024, we have seen more data requests, some sector specific. The focus on high-quality MI aligned to a firm's Product Governance Framework is relentless. Chris Warburton