Introduction
- Why is the FCA considering the introduction of a consumer duty?
- Scope of the new duty
- Regulated activities, payment services & e-money
- Effect on wholesale firms
- The new Principle and its Location – PRIN 12 and PRIN 2A
- The effect of not having a private right of action for breach of the duty
- Effect on Principles 6 and 7
Three Cross-cutting rules
- Interaction with the four outcomes
- Good faith
- Avoid foreseeable harm to customers
- Enable and support customers to pursue their financial objectives
- What is not involved
Four Consumer outcomes
- Products and Services (product governance)
- Price and value
- Consumer understanding
- Customer support
Products and Services (product governance)
- Defining manufacturer/distributor
- Joint manufacturing
- Application to existing products
- Approval process, monitoring and review
- Identifying target market
- Product testing
- Distribution strategy
- Distributors
- Approval and review process
- Target Market
- Gathering information from manufacturer
- Impact on PROD and RPPD
On price and value
- Defining value
- Assessing for foreseeable future
- Product packages
- Price differentiation – walking
- Closed and existing products
- Distributors’ obligations
- Effect of chains
- Regular reviews and monitoring
- Effects on other value assessments in PROD and COLL
On consumer understanding
- Before, during and after sale
- General scope
- The requirement – meet needs, likely to be understood and enable good decision-making
- Clear, fair, and not misleading
- Timeliness
- Testing and monitoring
On customer support
- Enable customer to use product
- No unreasonable barriers to switching, claiming or complaining
- Monitoring
- Websites
Finally, a little risk management and individual responsibility
- Firm monitoring and reports to governing body
- Annual board review
- New individual COCON rule 6