A new consumer duty
Council response published on 05 August 2021
Proposals for a new ‘consumer duty’ which will set a higher level of consumer protection across the financial services sector have been outlined by the FCA. The regulator has launched a consultation on the plans which will be open until the July 31. There is expected to be a further consultation on the rule changes later this year. The Council is asking its members for their views.
It is hoped that the new measures will ensure consumers always get products and services that are fit for purpose, represent fair value and are clearly communicated and understandable. The new duty will have three key elements:
- The Consumer Principle, which will reflect the overall standards of behaviour the FCA expects from firms. The wording being consulted on is: ‘a firm must act in the best interests of retail clients’ or ‘a firm must act to deliver good outcomes for retail clients’.
- Cross-cutting rules which would require three key behaviours from firms, which include taking all reasonable steps to avoid foreseeable harm to customers, taking all reasonable steps to enable customers to pursue their financial objectives and to act in good faith.
- It will also be underpinned by a suite of rules and guidance that set more detailed expectations for firm conduct in relation to four specific outcomes: communications; products and services; customer service and; price and value.
The Council will be submitting a response to consultation. Members that would like to submit their views within the Council’s response should email [email protected] The deadline for the Council to receive response is July 16.
For more information from the FCA click here.