Consumer Duty — What should firms be doing?

The FCA states that "The Duty is made up of an overarching principle and new rules firms will have to follow. It will mean that consumers should receive communications they can understand ,products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it." What's clear is that firms need to engage and understand the new rules — not just senior managers, but at all levels.

Fundamental questions will need to be asked, such as:

• How do we assess whether customers understand the information provided?
• Do we have appropriate MI to assess effectiveness of communications?
• Can managers evidence that they have taken reasonable steps to assess products,monitor sales and take action to address customer harm?
• Do our finance teams understand how they can help identify products, services and trends that are bad for customers?

The scope of the new rules is significant and compliance needs to be embedded in firms cultures. Although it is early days, and many manufacturers have been resourcing for many months to adapt to the changes, it is essential that firms engage in a robust process to understand the impact of the rules now: setting up project teams to understand the impact of the changes, assess their current customer journeys and client contact, and ensure existing digital platforms are fit for purpose. 

Whilst the new rules will undoubtedly be a challenge, when approached correctly they have the potential to help raise standards, engage consumers more effectively, and reinforce the value of advice and professionally-managed businesses.