The Financial Conduct Authority (FCA) has published a consultation document for new Consumer Duty rules for financial services firms.
We already have a huge raft of COBS (Conduct of Business Sourcebook) rules that runs into thousands pages, ESG rules (environmentally friend, socially responsible and corporate governance), TFC rules (treating customers fairly), Vulnerable persons rules, anti-money laundering rules, GDPR (general date protection regulations), KYC (know your client) rules, PROD (product intervention and product governance sourcebook) rules and many more including CPD (continuous professional development, capital adequacy, Brexit Trade agreement and HM Treasury financial sanctions lists to name just a few.
The new consumer duty rules follow on from research by the FCA where 1 in 4 people lack confidence in financial services firms. Only 35% of consumers said firms are honest and transparent and the FCA wants firms to have even greater empathy with clients by us asking ourselves: “Would I be happy to be treated this way?” We mention this forms part of our core approach where we claim we are consumers too, we buy goods and services out there everyday, the same as you do. We have exactly the same worries for mortgages, children, family, the bills and more. We just try to treat people the way would like to be treated when we buy goods and services. We believe this is self evident but clearly many firms do not.
Consumer Duty – 3 Key Elements:
A. A firm must act in the best interests of retail clients OR a firm must act to deliver good outcomes for retail clients.
B. Across the firm’s Culture, firms must take:
C. A new set of rules and guidance on FCA expectations for a firm’s conduct: