At its “Consumer Duty: One year on” webinar (recording here), Sheldon Mills, FCA Executive Director of consumers and competition, delivered a speech reflecting on the first year of Consumer Duty. A transcript of the webinar is also available.
·In considering the impact of the Duty to date, the FCA welcomes the improvements firms have made to deliver better consumer outcomes in the first year of the Duty. The FCA has seen new data and metrics developed, improvements in some cases in how vulnerability is recognised and recorded.
The FCA will continue to be proportionate in applying the requirements of the Duty, particularly for smaller firms. The main focus is on the price and value outcome, but service and understanding are also important elements of ‘value’. To support innovation and competitiveness, the outcomes-based nature of the Duty will allow the FCA to streamline its rulebook to support competitiveness and growth, while ensuring good consumer outcomes.
Going forward, the FCA will continue to focus on how firms are embedding the Duty, acting to address harm. Consumer Duty is not ‘done’; it is an ongoing journey for improvement for firms and for the FCA.
The transcript of the panel Q&A session provides some useful insights.
Graeme Reynolds (Director of Competition, FCA) offered what he sees as five key elements of fair value assessments, being
- good benchmarking;
- solid data and credible evidence;
- clear consideration of customer cohorts based on the target markets;
- clear examination of the total price paid relative to the benefits that customers are expected to receive over their lifetime; and
- the inclusion of considerations of customer understanding, support and the options a customer is given within the overall considerations of value.