The Consumer Duty framework is all about providing fairer, more consumer-focused outcomes for the customer, implementing these both proactively and reactively.
We as lenders and you as advisers need to support consumers to ensure they receive products and services that meet their needs and are fit for purpose. We’re also committed to offering products that provide fair value, as well as providing customers with the support they need, when they need it.
We understand that for many of you as advisers, this is already the way you support your customers and Consumer Duty will complement the way you serve your clients when it comes to delivering good customer outcomes.
“Consumer Duty in its essence, is about protecting the customer. Poor quality advice can create significant harm to customers, especially those who are vulnerable. Knowing the best products to fit your clients’ needs is only possible if you understand the products which are available. A sign of a great broker is one who knows how to really listen to their client but also when to challenge. Especially if a client believes a product is the right fit but doesn’t understand the financial impact it may have.” Emma Graham, business development director at Hodge advises.
The new rules
Under the new rules, Consumer Duty supports these outcomes for consumers:
1. Fair value
Firms are required to ensure consumers receive fair value. So you can be confident our products achieve these standards, we’ve created fair value assessment documents for all our products which can be downloaded below.
2. Products & Services
Firms must design products & services that meet the needs and objectives of customers in its target market. We’ve reviewed things like product governance frameworks to underpin key documents and processes. These will sit alongside our other recent process improvements, such as our vulnerability requirement process in our product lifecycle management.
Download our Product Intention guide below, this will give you details of our retail mortgages and the type of customer each product is designed to support.
3. Consumer understanding
Firms are now encouraged to collect new types of information and data on customers and consumers to improve their understanding. We’re working to redefine “what good looks like” when it comes to consumer understanding to ensure consumers are communicated to in a way they can understand, at every stage of the product/service lifecycle.
4. Consumer support
Firms need to meet diverse consumer needs. An ever-evolving aspect, we are improving provisions for all our customers and are making important updates where needed.
Final rules and guidance published by the FCA.
Lenders complete necessary reviews to meet the outcome rules for their existing open products and services and share this information with intermediaries.
Implementation deadline for new and existing products or services that are open to sale or renewal.
Implementation deadline for closed products or services.