The FCA published its latest consultation for financial services firms on 14 May. A new consumer duty sets out proposals to ensure a higher level of consumer protection in retail financial services (FS), including insurance.
In the consultation, the FCA urges firms to ‘step inside the shoes of consumers and ask whether they would be happy to be treated in the way I treat my customers.’
There are three aspects to the proposals;
A consumer principle, which is a standard phrase by which financial services firms will be judged against. The proposed wording is either ‘a firm must act in the best interests of retail clients’ or ‘a firm must act to deliver good outcomes for retail clients’.
Cross-cutting rules to ensure the right behaviours from FS companies with regards to how they treat their customers
Specific guidance that set out conduct expectations for customer communications, products and service, customer service and price and value
Additionally the consultation sets out the prospect of regulatory and enforcement action against failure to adhere to the guidelines.
The CHO view is that the consultation builds significantly on the FCA’s treating customers fairly agenda, and while not all members are FCA-regulated, there is little in the consultation that our industry would take issue with.
Good customer conduct is a core principle for our members, so we believe that there is much in the consultation to support. Our intention at this stage is to write to the FCA with a high level response only, but we are keen to seek opinions from across the membership while the consultation period is open.
A link to the consultation document is here.
Please send any views through to Matt Rowland by the end of June 2021. The consultation closes on 31 July 2021, and the new regime is expected to be implemented in July 2022.