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FCA’s paradigm shift: a new Consumer Duty

At the end of July 2022 the FCA issued its final paper on 'Consumer Duty' detailing new rules set to deliver higher standards of consumer protection across financial services. Here we take a quick look at the what, who and when so you can start to prepare.

What is the new Consumer Duty?

The 'Consumer Duty' demands that regulated firm conduct themselves

  • with a new level of responsibility
  • for the outcomes experienced by retail customers
  • when dealing with and buying products from such firms.

It also extends to those product distributors further up the chain who may not have a direct relationship with the customer.

What does it involve?

3 essential actions required of firms:

  • Take all reasonable steps to avoid causing foreseeable harm to customers.
  • Take all reasonable steps to enable customers to pursue their own financial objectives.
  • To act in good faith.

leading to

4 outcomes for customers:

  • Communications that enable customers to make effective and properly-informed decisions about financial products and services.
  • Products and services are actually designed to meet customers’ needs.
  • Customer service meets the needs of those customers and avoids putting obstacles in the way of customers’ wishes (e.g. slow response times, high exit fees leading to customer inertia).
  • Price of products and services are fit for purpose and represent 'fair value' for customers.

Who will it affect?

All FCA regulated institutions, with the proviso that the duty also extends to those in the 'supply chain' who do not necessarily deal directly with a consumer, including intermediaries, asset managers and insurance companies.


31st October 2022 - managing bodies and boards are expected to review and challenge their own systems and procedures and approve an implementation plan to satisfy the Consumer Duty requirements by the end of October.

31st April 2023 - all manufacturers of financial products must have completed that implementation plan so that these can be shared with intermediaries further up the chain to give them time to make their own arrangements to satisfy the Consumer Duty responsibility by 31st July.

31st July 2023 - all on-sale and new products must be structured in such a way to satisfy the Consumer Duty.

31st July 2024 - the Consumer Duty will apply to all 'closed' products - a longer transitional period because of the significant changes which will be required to policies and procedures relating to current products which are no longer sold. Read more in our article about the final stage of implementation of The Consumer Duty.

What do you need to do?

  • Establish a board-level executive responsible for the implementation plan.
  • Set-up systems which enable boards to monitor how the firm is achieving good customer outcomes.
  • Ensure cooperation between project and business teams.
  • Review procedures and policies to analyse the extent to which these need to change.
  • Identify existing and closed products and those in the pipeline, all of which will be required to meet the Consumer Duty requirements.

Inevitably, it will take time to see the effect of this duty on the market but steps need to be taken now to ensure you are best placed to meet this responsibility.

As firms will need to reflect the Duty in their strategies, governance, leadership and people policies it may feel like there is a large amount of work to be accomplished in a very short amount of time. However, our financial services solicitors are on-hand to provide prompt and experienced advice and assistance.

About our expert

John Pauley

John Pauley

Financial Services Partner
John is a specialist solicitor with extensive expertise in financial services regulation. He advises financial institutions, services providers, and merchants on regulated activities including payments, e-money, consumer credit, data protection, anti-money laundering, and gambling operations.

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