FCA updates on Consumer Duty requirements and focus areas

Following its call for input on the Consumer Duty requirements, the FCA has set out progress on the action it has taken so far, and further action it plans to take following stakeholder input.

Priorities for streamlining its regulatory requirements remain flexibility, predictability and improved flexibility. So far, the FCA has: improved accessibility with its rule review feedback tool, which is embedded into the new Handbook website and allows users to directly feedback where they believe rules could be improved; and withdrawn a large number of historic supervisory communications. The following initiatives are in progress:

• Reviewing international application of insurance conduct rules – consultation on disapplying the Duty in respect of business with non-UK customers is expected mid-2026;
• Reviewing mortgage rules – the FCA is analysing responses from its discussion paper on the future of the mortgage market and will announce further details in due course;
• Reviewing Assessment of Value reporting for asset management – policy statement expected in Q4 2025;
• Simplifying the rules for insurance and funeral plans – policy statement expected in Q4 2025;
• Reviewing advertising consumer credit rules – consultation reviewing financial promotion rules expected in Q1 2026;
• Consulting on targeted clarifications of Handbook materials – consultation expected in Q4 2025; and
• Piloting guides for smaller firms – pilot aimed at supporting smaller firms with outcomes-focussed regulation planned for consumer finance firms in Q1 2026, and call for views expected in Q4 2025.

It also plans to hold a series of sector-level roundtables during 2026.

The FCA has also outlined its Consumer Duty priority areas for 2025 – 2026, during which time 4 cross-cutting reviews will take place, covering: the products and services outcome; firms’ approaches to outcomes monitoring; firms’ customer journey design; and the consumer understanding outcome.

For specific sectors, the FCA plans to tackle the following areas of concern:

• Retail banking – fair value in SME business current accounts;
• Consumer finance – consumer understanding in the credit card market;
• Consumer investments – poor identification of clients with characteristics of vulnerability, expectations when assessing fair value, risks to providing unsuitable advice, complex exchange traded products (ETPs) and loan-based crowdfunders; and
• Wholesale buyside – model portfolio services.