FCA updates on Consumer Duty – one month to go!

FCA is pleased with the preparations many firms have made for the Consumer Duty, and has highlighted 10 questions it thinks firms could be usefully asking themselves.  The key questions include:

• whether a firm is satisfied that its products and services are well designed to meet the needs of their target market, what changes have been made if firms have found any potentially harmful features, and what testing has been done?
• what action have firms taken as a result of their fair value assessments, how are they ensuring the action is effective in improving consumer outcomes and what data, MI and other intelligence are they using to monitor fair value on an ongoing basis?
• how are firms testing the effectiveness of their communications and adapting them for vulnerable customers (and testing how that works)?
• how have firms satisfied themselves that their post-sale support is as good as pre-sale?
• do all relevant individuals understand their role and responsibility in delivering the Duty?
• have firms identified, and put in places mitigants around, key risks to their ability to deliver good outcomes?

FCA has also published the results of a survey of just over 1200 firms, which ran from March to early May, and was designed to give FCA an idea of firms’ preparedness. It focussed on smaller firms, and sectors where it thought firms may be less prepared. It generally found good levels of preparedness and awareness, with only 7% saying they would still have significant work to do after the deadline. Retail finance providers and debt advice firms consistently scored lower than others. FCA will use feedback from the survey, which was anonymous, to target future communications.

FCA now urges firms to:

• keep good oversight of their implementation plans to make sure they deliver, if they believe they are in line to do so;
• make maximum use of available time and prioritise key actions, if they are struggling to complete all their work before the deadline;
• make strenuous efforts to accelerate their work, if they have not been taking the Duty seriously and are a long way from compliance; and
• tell FCA if they believe they will be in significant breach of the Duty – and be prepared for FCA to take robust action.