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Consumer Duty: The annual Board report

Publication date:

18 November 2024

Last updated:

18 November 2024

Probably for most, the annual board report addressing Consumer Duty was a snapshot piece of work that may or may not have highlighted areas where there were potential gaps and shortfalls.

However, we know the FCA considers Consumer Duty to be a continuous activity, and not a one and done tick box exercise. So, what do your records show regarding updates and management information addressing any elements highlighted?

Can you demonstrate the steps you have taken since identifying an issue to show progress? If no progress then what steps have been taken, why not resolved, and which new steps are being taken or planned?

Next year’s report will have to show this granular detail if the FCA ask for sight of your report – even more so if they have had last year’s already.

Of course, in addition you will have to be able to evidence any new areas you have identified and the plan to address these new elements – some of which may be as a result of failing to clear previous issues. Identify, record, and address the issues, do not hide them.

It is important to remember that the annual report is not a tick box, everything is fine, report. The FCA expect and want to see progress, but of course there will always be something that is being worked on, not quite finished, or has uncovered other issues or unforeseen results from previous actions.

Leaving the next report until July is not a sensible option, and trying to backtrack on management or board decisions without some form of tracking record will make life harder than it needs to be.

Consider:

  • Review the July 24 report and list all highlighted issues
  • Set up a clear record of actions taken, when and by whom
  • Make sure management and board decisions are noted, and the meeting minutes reflect decisions made – again easier to do as you go than wait until July 25
  • Where elements cannot be completed, what action plans are in place? Who is responsible for completing and logging regular updates?
  • Identify new issues since July 24
  • Record positive outcomes when they happen as evidence of improvement – don’t be afraid to praise where things go well
  • Note negative outcomes and steps taken with solid root cause analysis

A relatively simple spreadsheet can keep you on track. This does not need to be a templated project planner’s multicoloured document. Something clear and easy for the Consumer Duty champion to demonstrate what steps have been taken will be more than sufficient.

If called upon, the FCA will want to see the evidence that supports the report, so my advice is to not leave this until the last minute.

For further reading on the topic, the CII recently published a White Paper on Consumer Duty Board reporting with some additional recommendations for firms.