25 January 2023
If you are covering the publication of the FCA’s multi-firm review of Consumer Duty implementation plans, please find below a comment from Roddy Munro, head of proposition specialists at Quilter:
“Today’s multi-firm review from the FCA highlights just how seriously the regulator is taking the new Consumer Duty. It is a helpful document in that it not only sets out where improvements in implementation plans can be made, but also what is currently being assessed as best practice and where the industry needs to be setting its sights. Time is ticking in terms of getting processes and actions in place and this review highlights that as an industry we cannot take our foot off the gas.
“Given the professionalisation of the advice industry in the last decade and an increasing focus on value, many will be in a good starting position. It is this value that is so important, and it should not be confused for price. Clients and their families will value different elements of advice at different points over their lifetimes. As such we cannot look at price in isolation, but as part of the wider picture when evidencing value to clients. This Duty, therefore, presses home the point of having quality data collection for each product and service and ensuring the correct metrics are in place in order to remain compliant. We cannot rest on our laurels that we do much of this already.
“While the FCA hasn’t been overly prescriptive in what it is expecting, this should not be confused with a lack of certainty from the regulator. Indeed, detail and accountability are key. The regulator has flagged today that you must be clear about who is leading the programme, with clear timelines and information on how the Duty will be embedded within company culture.
“We have moved to an era of outcome-based regulation and as such providers and advisers need to take what they believe are the necessary steps to evidence good customer outcomes and fair value. This means doing a thorough gap analysis of the products and services you offer, assessing your client communications and creating a customer centric culture within your business.
“While these internal plans should be well advanced, it is necessary that providers and advisers do not silo themselves and leave themselves open to risk of third-party non-compliance. We all play different roles in the value chain and rely on a variety of suppliers and thus a collaborative approach is required to ensure we achieve good customer outcomes. Knowing who the product manufacturers are, how a product or service is distributed and who owns the client relationships, as well as what roles others play will be crucial to make the Consumer Duty the success we want it to be.”
