On 14th May 2021, the FCA issued a Consultation Paper “CP21/13 – A New Consumer Duty”. The FCA are consulting on a new Consumer Duty that is designed to set clearer and higher expectations for firms’ standard of care towards Consumers. The FCA want to see a higher level of consumer protection in retail financial markets and want to ensure the correct firm cultures and behaviours.
This is building on the current Principles, in particular Principles 6 and 7 – Customers’ Interests and Communications with Clients and is in relation to Retail Clients.
In essence, the FCA want to see firms putting themselves in their customers’ shoes, asking themselves questions such as ‘would I be happy to be treated in the way my firm treats its customers?’, or ‘would I recommend my firm’s products and services to my friends and family?’. This paper builds on the already integral part of a firm’s processes, in particular in relation to TCF and a Client’s Best Interests. It also ties in the work the FCA have done on Vulnerable Clients.
The FCA, as always, have asked for feedback on their proposals, which can be sent to them via their online response form, or via email or post by 31 July 2021. A second consultation paper is due 31 December 2021 (Happy New Year!) with the new rules proposed for implementation 31 July 2022. We will naturally keep abreast of this consultation and provide updates accordingly. At present our summary of the paper is available in the Document Centre on BAT.