Skip to Main Content

FCA Consumer Duty

What is Consumer Duty?

The Consumer Duty is a large regulatory change initiated by the Financial Conduct Authority (FCA) that sets out higher and clearer standards of consumer protection for financial services firms. The Duty requires firms to take action to deliver Good Outcomes for customers, taking into consideration the needs, characteristics and objectives of their customers. The Duty not only requires firms to act to deliver Good Outcomes at every stage of the customer journey, but also to understand and evidence how Good Outcomes are being met.

The Consumer Duty comprises of:

  1. A new Consumer Principle: “A firm must act to deliver Good Outcomes for retail customers”
  2. Cross-cutting rules providing greater clarity on the expectations under the Consumer Principle, requiring firms to:
    1. Act in good faith
    2. Avoid causing foreseeable harm
    3. Enable and support retail customers to pursue their financial objectives
  3. Rules relating to the four outcomes that the Duty intends to achieve:
    1. Fair value: consumers receive fair prices and quality
    2. Suitability and treatment: consumers receive suitable products and services and receive good treatment
    3. Confidence: consumers have strong confidence and levels of participating in markets
    4. Access: diverse consumer needs are met
  4. Extending the FCA “Individual Conduct Rules” to require all staff to ‘act to deliver good outcomes for retail customers’. This means that all staff have a legal duty to be proactive and take action to achieve the requirements of the Duty in their own roles. If something goes wrong, members of staff who cannot demonstrate they acted to deliver good outcomes could be subject to individual regulatory sanction. The FCA aim and expectation is that all staff take their duties under this regulation seriously and Markel expects the same.