'A "paradigm shift" in the way firms are expected to treat customers'
In what is set to be one of the most significant regulatory enhancements in recent years, the new Consumer Duty from the Financial Conduct Authority (FCA) is intended to strengthen consumer protections and set a higher expectation on standards of conduct for both insurers and advisers alike, writes Greg Levine, Chief Operations and Growth Officer at Vitality.
The new rules, which come into force on the 31st July 2023, shift the focus to an outcomes based approach to conduct and the need for financial products and services to deliver good outcomes for consumers. In this context, Consumer Duty should be seen as a significant step up from simply treating customers fairly.
Whilst there may be a temptation for some firms to believe they’re already delivering on this and therefore the regulations don’t apply to them, it is a good idea for advisers not to be complacent. The implementation of Consumer Duty presents an opportunity for all firms to review their processes and stress-test their advice, to ensure client needs are being met and good outcomes are being delivered at every stage of the advice journey.
Ultimately, the new regulations are about driving up standards and consumer protections, and when implemented successfully should help to improve the overall standing of the financial services industry.
At Vitality we are committed to supporting advisers in their understanding of Consumer Duty. Our ‘Unpacking Consumer Duty’ series brings you the expert views of our Group Compliance Director Steve Allibone, on the various key aspects of the regulations.
What do 'good client outcomes' look like?
At the heart of the new Consumer Duty regulations is a new consumer principle requiring firms to deliver ‘good’ client outcomes. This article examines what ‘good outcomes’ look like in practice and the implications for advisers.
What is Fair Value?
As one of the core underlying principles of Consumer Duty, ‘Price and value’ has significant implications for the health and protection industry. In this article we examine what fair value means and how the industry can ensure its delivering fair value to clients.
The cross-cutting rules and how to avoid 'foreseeable harm'
The cross-cutting rules lay the foundations for how the FCA expects firms to operate with regards to their conduct towards clients. Perhaps most significant is the need to avoid ‘foreseeable harm’, which we examine in this article alongside the two other rules.
Supporting vulnerable customers
Supporting vulnerable customers is a key requirement for all firms and in this regard Consumer Duty aims to strengthen those protections. At a time when challenges such as the pandemic and cost-of-living crisis are increasing the vulnerabilities clients may experience, it is essential advisers understand how to identify and support the needs of vulnerable customers.