The implementation period for the Consumer Duty runs until the end of July 2023 in relation to all new and ‘open’ products and services, and to the end of July 2024 for all ‘closed’ products and services. For insurance intermediaries, a ‘closed’ product will be one that can no longer be sold or renewed. The FCA has confirmed its high-level expectations of firms in relation to the implementation of the Consumer Duty.
- By the end of October 2022, firms’ boards (or equivalent management body) should have agreed their implementation plans and be able to evidence they have scrutinised and challenged the plans to ensure they are deliverable and robust to meet the new standards required by the Consumer Duty. Firms should be able to share implementation plans, board papers and minutes with supervisors and be challenged on their contents.
- Manufacturers should aim to complete all the reviews necessary to meet the four outcomes rules for their existing open products and services by the end of April 2023, so that they can share with distributors, by the end of April 2023, the information necessary for them to meet their obligations under the Duty (e.g., in relation to the price and value, and products and service outcomes); and identify where changes need to be made to their existing open products and services to meet the Duty and implement these remedies by the end of July 2023.
- Where firms identify serious issues causing immediate consumer harm, they should prioritise action to remedy this. This is particularly important where the harm is likely to be a breach of existing requirements (e.g., TCF). Significant breaches of existing rules (including the Principles for Businesses) should be reported to the FCA, as required by SUP 15.3.11R in its Supervision sourcebook (part of the FCA Handbook.
- Where actions to bring products and services up to Consumer Duty standards can be completed more quickly than the implementation deadlines, firms should consider doing so, to improve outcomes for consumers more quickly.
- In line with Principle 11 (Relations with Regulators), firms should engage with the FCA if, as part of implementation of the Duty, they are considering withdrawing or restricting access to products or services in a way that will have a significant impact on vulnerable consumers or on overall market supply.
- Boards (or equivalent management bodies) should maintain oversight of their firm’s implementation plans to ensure they remain on track, and that the work to review and improve the firm’s products and services is sufficient to meet the Duty standards. We recommend that this remains a standing agenda item, throughout the implementation period, for Boards and equivalent management bodies.