The FCA has outlined a new Consumer Duty. This will most likely be set out as rules and guidance in the FCA handbook.

Ultimately, there will be a higher level of protection for consumers and a higher level of expectation of care from firms providing services.

The Consumer Duty will require your firm to:

• ask what outcomes consumers should be able to expect from their products and services
• act to enable rather than hinder these outcomes
• assess the effectiveness of their actions

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What are the key three elements?

1. A Consumer PrincipleStrengthens the existing principle 6, that a firm must have due regard to the interests of its customers and treat them fairly. Firms must now take an objective standard as a whole and consider the reasonable expectations of consumers when buying/using their product or service.
2. Cross-cutting rules These rules will set out the key behaviours required by the Consumer Duty and make clear what the Consumer Principle requires from firmsTo act in good faithTo take all reasonable steps to avoid foreseeable harm to consumersTake all reasonable steps to enable consumers to pursue their financial objectives
3. Four outcomesThe Four Outcomes represent the key elements of the firm-customer relationship: How firms design, sell and service products and services, and the key contact points along the customer journey.

The behaviour and actions of firms in relation to the four outcomes play an important part in enabling consumers to meet their financial needs and improve their financial wellbeing.

What it means for you

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• Review your current processes, especially in relation to your communications, products and services, customer service and price and value.
• Think about the type of measurable information (KPIs) you can extract to validate that the business is performing in line with the new Consumer principle.  

How can we help

If you need any help or would like an initial chat to understand what your business may require contact MEMA today at contact@memaconsultants.com or call us on 03301330811