What Firms Need to Know About the FCA’s Consumer Duty

Final rules are expected on the FCA’s upcoming Consumer Duty at the end of July. This will be followed by an implementation period that is proposed to end on 30 April 2023. What does the FCA’s Consumer Duty mean for firms?

The Consumer Duty requires firms to focus on consumer outcomes, putting the customer’s interests at the heart of their activities.

There are three key elements of the new regulation, which are:

  • A Consumer Principle – ‘a firm must act to deliver good outcomes for retail clients’, which reflects the overall standards of behaviour the FCA wants from firms, and which is developed by the other elements of the Consumer Duty.
  • Cross-cutting rules which develop overarching expectations that apply across all areas of firm conduct:
    • act in good faith towards retail customers
    • avoid foreseeable harm to retail customers, and
    • enable and support retail customers to pursue their financial objectives
  • Four outcomes which give more detailed expectations for the key elements of the firm-consumer relationship, covering:
    • Products and services
    • Price and value
    • Consumer understanding
    • Consumer support

Where firms are following other rules introduced over the last five years – i.e. the Insurance Distribution Directive (IDD), value measures, General Insurance Pricing and product governance rules – they should be well on the way to meeting FCA expectations under the Consumer Duty. A firm’s compliance with these existing rules is likely to impact how much they will need to do to comply with the Consumer Duty, but there will be work to do for all firms.


A key element of the Consumer Duty is the requirement on firms to assess, test, understand and evidence the outcomes their customers are receiving.

Firms will be expected to:

  • monitor and regularly review the outcomes that their customers are experiencing
  • ensure that the products and services they provide are delivering the outcomes that they expect in line with the Consumer Duty, and
  • identify where they are leading to poor outcomes or harm to consumers

Where issues are identified, they should be addressed appropriately. Potential interventions could include: discontinuing a product or service, adapting product design/fees/charges, operation or distribution channels, or, where customers have suffered harm, redress.

The Consumer Duty will apply across all of a firm’s activities – from high-level strategic planning to individual customer interactions. Internal processes will need to be reviewed and customer service processes may need to be re-evaluated. Crucially, it should not be a ‘tick box’ exercise, but something firms should approach more proactively in ensuring that their products and services are fit for purpose and provide fair value.

If you need any advice on this or any other compliance issues, please contact your RWA Business Manager or email helpdesk@rwagroup.co.uk.

For those signed up to the Aviva Development Zone, keep an eye out for upcoming new content covering the Consumer Duty. For those not currently using the system, sign up a free 14-day trial here: https://mydevelopment.zone/#getStarted

About the author

Kirk joined RWA in 2015, having worked in the financial services sector for many years. He started out in both the general insurance and mortgage advice arms of HSBC, before becoming the Compliance Officer at Go Compare and Training & Competence Manager at Optimum Credit. 

At RWA, Kirk is Deputy Head of Compliance. He supports RWA clients by looking after their compliance, training and competence needs and keeping them up to date with regulatory changes. He promotes the achievement of fair customer outcomes and specialises in designing and implementing T&C schemes for firms of all sizes.

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