Consumer Duty is a significant regulatory requirement for UK financial services firms and their day-to-day operations. It is coming up to one year since the Consumer duty deadline for open products and fast approaching is the closed products deadline on 31^st July 2024. Whilst deadlines often represent the end of something, this is not the case. Consumer Duty requirements are here to stay and need to be adhered to for the foreseeable future.

ComplyPortal has made available several tools to help clients meet key requirements and support your firms ongoing compliance with both open and closed products:

1. Consumer Duty Policies and Papers:
   • Consumer Duty Diagnostic Assessment
   • Consumer Duty Annual Report
   • Consumer Duty Monitoring
   • Fair Value Assessment Policy (Open Products)
   • Product Assessment Policy ( Open Products)

2. Consumer Duty Readiness Assessment (Open Products):

If your firm still needs to identify gaps in your Consumer Duty, then take ComplyPortal’s Consumer Duty Readiness Assessment where our regulatory consultants have prepared questions and scoring to guide you through assessing your readiness.

Our assessment is broken up into 7 scoring questionnaires covering the following:

1. Corporate Governance
2. Customer Identification
3. Existing Products and Services
4. New Products and Services
5. Price and Value
6. Consumer Understanding and Support
7. Staff Training

3. New Consumer Duty Questionnaire (Open & Closed Products):

Detailed, relevant and specific regulatory information available via Monitoring module within ComplyPortal Software.

This questionnaire covers the following topics: Manufacturing, Distribution, Fair Value, Communications with Retail Customers, Delivering good outcomes, Sale and purchase of Product books.

4. Ongoing Monitoring & Reporting Capacity (Open & Closed Products):

ComplyPortal provides a full suite of Compliance support modules all in one platform, aiding the pursuit of more efficient and complete compliance processes.

Monitoring questionnaires are created by our in house expert consultants however, custom questionnaires can also be integrated.

Tasks can be assigned to individuals or groups with custom schedules and email reminders to ensure responsibilities and kept up with and on time.

• Monitoring
• Approvals
• Registers
• Attestations
• Documents
• Prompt
• Risk
• SM&CR

To see how these tools can support your Consumer Duty compliance, or how our full suite of modules can assist your wider compliance needs, Book a Demo.

About ComplyPortal:

First developed in 2011 by compliance professionals for compliance officers, ComplyPortal offers workflow, automation, and several modules to help firms with control and regulatory compliance monitoring. 

ComplyPortal simplifies financial services regulatory compliance management on an easy-to-use cloud-based comprehensive compliance platform. It enables compliance officers, risk officers and senior management to keep track of their firm’s regulatory responsibilities and workflows. Our platform includes the following modules, among others: 

• Monitoring: a year-round schedule pre-populated with monitoring questionnaires to ease compliance processes.
• Approvals: authorise request and keep track of workflows
• Registers: lists controlled by the Compliance officer, but easy for staff to view.
• Risk: map and control risk areas to effectively identify and manage risk for your firm.
• Training: access our LMS platform for all Compliance and Governance Training

The Consumer Duty has been and is a significant regulatory requirement for UK financial services firms and their day-to-day operations. Here are the key points to be aware of:

 Closed Products Implementation Deadline: 31^st July 2024

Key Requirements

1. Outcomes-Based Regulation: The Duty is outcomes-based, meaning firms must focus on delivering good outcomes for consumers. This includes ensuring products and services meet consumer needs, offer fair value, and provide appropriate support.
2. Fair Value: Firms must ensure that the fees and charges associated with their products and services are fair and transparent. This includes considering the overall benefits and quality of the product or service.
3. Consumer Understanding: Firms must provide clear and understandable communications to consumers, ensuring they can make informed decisions.
4. Consumer Support: Adequate support must be provided to consumers, especially those in vulnerable circumstances.

Monitoring and Evidence

1. Data and Technology: Firms are encouraged to use data and technology to monitor and evidence the outcomes they achieve for their customers.
2. Annual Board Report: At least once a year, the board or equivalent governing body must review and approve an assessment of whether the firm is delivering good outcomes for its customers. This assessment should include monitoring results and any evidence of poor outcomes.

FCA’s Supervisory Approach

The FCA will take a proportionate approach to supervision and enforcement, prioritizing the most serious breaches and acting swiftly where there is evidence of harm or risk of harm to consumers. The FCA will work closely with the Financial Ombudsman Service and other regulatory bodies to ensure a joined-up approach to the Duty’s implementation and enforcement. The FCA has made it clear that they want to see firms making best efforts to comply, and that firms have a credible plan to identify and address any shortcomings in regard to the Duty.

Exemptions and Exceptions

The Duty does not apply retrospectively to past actions by firms. It will apply on a forward-looking basis to existing products and services. Regarding closed products, firms are not expected to consider the target market and distribution strategy. However, they must still ensure that these products do not lead to foreseeable harm or frustrate customers’ financial objectives.

Next Steps for Firms

1. Review Implementation Plans: Firms should review their implementation plans to ensure they have made the necessary changes and that these changes are effective in delivering good consumer outcomes.
2. Focus on Data and Monitoring: Firms should harness data to improve their products and services and to evidence the outcomes they are achieving for their customers.
3. Prepare for Closed Products Deadline: Firms should start preparing for the 31 July 2024 deadline for closed products and services, prioritizing areas where there is the greatest risk of consumer harm.

Conclusion

The Consumer Duty represents a significant shift in regulatory expectations, focusing on delivering good outcomes for consumers. Firms must ensure they are compliant by the relevant deadlines and continuously monitor and improve their practices to meet the Duty’s requirements. The FCA has published comments related to Consumer Duty Implementation: Good Practice and Areas for Improvement. The FCA will be closely monitoring firms’ compliance and will act where necessary to protect consumers.

Take the next step

ComplyPortal offers the ability to tackle all 3 of the recommended next steps for firms.

1. Review your implementation plans with our Consumer Duty Readiness Assessment & Consumer Duty Policies and Papers
2. Focus on data making full use of our suite of modules to assist in Monitoring and Reporting, accompanied by our expertly crafted New Consumer Duty Questionnaire.
3. With the deadline passed, Consumer Duty remains an important compliance consideration. Book a Demo, to see how ComplyPortal can help you take your next steps toward compliance. Or alternatively click below to view our full range of services:

• Modules
• Tools

Sources

1. FCA Speech: Consumer Duty – the art of the possible in a year (Delivered by Sheldon Mills, Executive Director, Consumers and Competition, February 2024) https://www.fca.org.uk/news/speeches/consumer-duty-art-possible-year
2. FCA Speech: Countdown to the Consumer Duty (Delivered by Sheldon Mills, Executive Director, Consumers and Competition, on 10 May 2023 at EY) https://www.fca.org.uk/news/speeches/countdown-consumer-duty
3. FCA Policy Statement PS22/9: A new Consumer Duty (Published in July 2022) https://www.fca.org.uk/publications/policy-statements/ps22-9-new-consumer-duty
4. FCA Speech: Consumer Duty – Not once and done (Delivered by Nisha Arora, Director of Cross Cutting Policy and Strategy, on 1 November 2023 at Deloitte) https://www.fca.org.uk/news/speeches/consumer-duty-not-once-and-done
5. FCA Speech: Consumer Duty (Delivered by Sheldon Mills, Executive Director, Consumers and Competition, on 11 June 2024)
6. FCA Policy Statement PS23/6: Financial promotion rules for cryptoassets (Published in 2023) https://www.fca.org.uk/publications/policy-statements/ps23-6-financial-promotion-rules-cryptoassets
7. FCA Dear CEO Newsletters – Closed products and services, https://www.fca.org.uk/firms/consumer-duty/resources

To out more about how the ComplyPortal platform can help firms adapt to new regulatory expectations at: https://complyportal.uk/modules/

About ComplyPortal:

First developed in 2011 by compliance professionals for compliance officers, ComplyPortal offers workflow, automation, and several modules to help firms with control and regulatory compliance monitoring. 

ComplyPortal simplifies financial services regulatory compliance management on an easy-to-use cloud-based comprehensive compliance platform. It enables compliance officers, risk officers and senior management to keep track of their firm’s regulatory responsibilities and workflows. Our platform includes the following modules, among others: 

• Monitoring: a year-round schedule pre-populated with monitoring questionnaires to ease compliance processes.
• Approvals: authorise request and keep track of workflows
• Registers: lists controlled by the Compliance officer, but easy for staff to view.
• Risk: map and control risk areas to effectively identify and manage risk for your firm.
• Training: access our LMS platform for all Compliance and Governance Training