The FCA has said that it expects “the implementation of the Consumer Duty to be iterative” and that the FCA itself will “learn more from firms’ implementation”. According to the FCA, there is also no fixed or “one size fits all” approach to monitoring by a firm to determine if it is compliant with the new Consumer Duty requirements. Firms will need to use their judgment, the FCA has advised.
It is abundantly clear that the FCA wishes to raise standards. However, in a number of areas, there is uncertainty around the scope of the new rules and their application. Given the time required by firms to be ready for the changes, the likelihood that the FCA will want to use its new powers to demonstrate their use and effectiveness, and the potentially severe consequences of breaching the Consumer Duty, we recommend that firms that have, or expect to have, retail customers prepare now.
How can Macfarlanes help?
We encourage firms that would like to engage further in understanding and implementing the rules to contact us. We are already advising clients on their response to the incoming Consumer Duty and preparing for the 30 April 2023 deadline. To help address the many challenges, we have designed an inventory of Consumer Duty materials needed to ensure compliance. If you would like to speak to us about your own implementation project or discuss our materials, please contact any of our Consumer Duty contacts.