FCA Publishes Findings of Consumer Duty Firm Survey

In Autumn 2023, the FCA conducted a survey of 634 firms, which had not previously been surveyed, to assess how smaller firms with between 1-49 employees had implemented the Consumer Duty and whether these firms had altered their consumer contracts and financial promotions.

The survey revealed that significant improvements had been made since Spring 2023. Key findings:

• The proportion of firms reporting that they had completed the steps required significantly increased for some portfolios, with 43% of surveyed firms reporting no difficulties with implementing any aspect of the Duty.
• The percentage of firms conducting relevant activities has increased for several aspects of the Duty; 74% of firms reported that they have identified the target market of their products and services, and 73% reported that they have nominated a member of staff, team, or committee to oversee the implementation of the Duty.
• 74% of firms reported that they have conducted a fair value assessment (note, this measure was not included in Wave 1 of the research).
• 38% of firms have improved significant consumer contracts and 30% of firms have either made significant improvements to their marketing strategies, or identified areas which require improvement.

Firms must ensure that they are not only undertaking necessary steps and activities to embed the Duty, but that they are also able to evidence this and that they are delivering good outcomes for consumers.

The FCA will look to board assessment reports to assess firms’ implementation of the Duty, and if limitations or weaknesses are detected, it will take the following action:

• thematic work considering issues and harms that arise across multiple retail markets, followed up by sector specific interventions where appropriate;
• multi-firm work within sectors where the FCA has noticed concerns, common themes and risks;
• interventions where the FCA has concerns regarding the approach individual firms have taken to implement the Duty and the outcomes they are delivering for their customers.

Ahead of the end of July deadline for the Board Report, firms who are uncertain how to evidence implementation of Consumer Duty, present and evidence related activities or demonstrate delivery of good consumer outcomes, are welcome to get in touch with UKGI Compliance who can consult with them on this. Get in touch at: info@ukgigroup.com, or 01925 765777