FCA warns of impending Consumer Duty deadline

The Financial Conduct Authority (FCA) is reminding financial services firms to ensure they are prepared for the upcoming Consumer Duty, with less than 90 days until the deadline of 31 July. Sheldon Mills, Executive Director of Consumers and Competition at the FCA has warned that companies that neglect their Duty or pose the greatest harm can expect prompt action.

In his speech, Mills stated that the FCA's supervisory and enforcement strategy would be proportionate to the harm or risk of harm to customers, with a sharp focus on outcomes. The agency will prioritize the most severe breaches and respond swiftly and assertively when evidence of harm or risk of harm to consumers is discovered. In some cases, the FCA may take strong action, such as interventions or investigations, as well as potential disciplinary sanctions.

Mills also praised financial services firms' efforts to implement the Duty, highlighting how it could enhance the competitiveness of the sector. He stated that the Consumer Duty will help the UK financial services industry remain a world leader in financial services, as companies must think more critically about innovation and competition to find better ways to serve customers. Correctly implemented, Duty should assist firms in retaining and attracting clients while improving the competitiveness of the financial services sector.

The FCA is sharing findings from its review of firms' fair value assessment frameworks to further assist businesses. The review discovered that firms had thoroughly considered the FCA's price and value criteria, but some still have work to do to comply with the regulations. The FCA has identified four key areas for companies to concentrate on, including gathering evidence to show that products represent fair value and maintaining clear oversight of actions to take if products do not provide fair value.

Finally, the current cost-of-living squeeze underscores the importance of customers receiving fair value, which should also benefit the industry's competitiveness as companies strive to provide the best service to attract customers.