PIMFA
CONSUMER DUTY
The Consumer Duty is intended to ensure a higher standard of care across financial services for retail customers and to deliver good consumer outcomes throughout the life cycle of products and services.
The Consumer Duty is a significant regulatory change with a need for a shift in culture and mindset to focus on delivering good outcomes for retail customers. The Consumer Duty is subjective and requires a holistic approach: firms need to consider the application of the duty in line with their size, type and role within the distribution chain.
- Background and aim
The Consumer Duty aligns with the Financial Conduct Authority’s (FCA) business priorities focused on consumer outcomes and reducing and preventing serious harm. The FCA is increasingly focused on addressing consumer harms, particularly given the rise in customer vulnerability (as shown by responses to the FCA’s Financial Lives Surveys). The Consumer Duty intends to create a higher level of consumer protection in retail financial services, with the FCA highlighting their data-led and outcomes-based approach to supervision.
- ELEMENTS OF THE CONSUMER DUTY
- Consumer Principle 12 states that a firm must act to deliver good outcomes for retail customers.
- Cross-cutting rules state that firms must:
- Act in good faith toward retail customers
- Avoid causing foreseeable harm to retail customers
- Enable and support retail customers to pursue their financial objectives
- Products and services
- Price and value
- Consumer understanding
- Consumer support
This report is free for our members and is available to purchase for non members.
12 December 2024
Financial Conduct Authority: Our Consumer Duty focus areas
The Financial Conduct Authority (FCA) has published their priorities under the Consumer Duty for the remainder of 2024/25.
The four Consumer Duty focus areas cover thematic, multi-firm and market-wide work, demonstrating a pivot towards the Consumer Duty:
- Embedding Consumer Duty and raising standards
- Enhancing understanding of the price and value outcome
- Sector specific priorities
- Realising the benefits of Consumer Duty
The FCA notes that firms should expect a general focus on their implementation and embedding of the Consumer Duty and customer outcomes as part of any supervisory engagement.
Read our summary here
Financial Conduct Authority: Complaints and root cause analysis review findings
The Financial Conduct Authority (FCA) has published findings of their review of complaints and root cause analysis (RCA) to help firms in effective embedding and implementation of Consumer Duty (CD) setting out examples of good practice and areas for improvement.
Access the full publication here.
Read the PIMFA summary
Financial Conduct Authority Consumer Duty Board Reports: good practice and areas for improvement
The Financial Conduct Authority (FCA) has published findings of the review into firms’ approaches to the first annual Consumer Duty (CD) Board report. The publications outlines five key examples of good practice and areas for improvement as well as sections on monitoring outcomes, governance actions taken to comply with CD obligations, and future business strategy.
Access the full publication here.
Read the PIMFA summary
