Consumer Duty

Final rules (1.3mb pdf) and guidance (1.6mb pdf) were published by the FCA.

Firms’ boards (or equivalent management body) should have agreed their implementation plans and be able to evidence they have scrutinised and challenged the plans to ensure they are deliverable and robust to meet the new standards.

This information should have been shared with mortgage intermediaries (distributors) so they can meet their obligations under the Duty (relating to price & value and product & services outcomes).

This relates to:

• A new Consumer Principle (Principle 12) that requires firms to act to deliver good outcomes for retail customers.
• Cross-cutting rules requiring firms to act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives.
• Four Outcomes rules requiring firms to ensure consumers receive communications they can understand, products and services meet their needs and offer fair value, and the support they need.

Firms must also ensure the new Conduct Rule is implemented.

By the deadline, intermediary firms to have:

• completed their fair value and target market assessments (as a distributor)
• take the information supplied by manufacturers (lenders) and factor it into their own fair value and target market assessments

At the end of the implementation period, boards (or equivalent management bodies) should assure themselves that their firm is complying with their obligations under the Duty and ensure the firm had identified any potential gaps or weaknesses in their compliance and any action needed to remedy this.