A tick-box approach to implementing incoming rules will not suffice as the Financial Conduct Authority (FCA) has warned it is already acting with a Consumer Duty mindset.
This is according to Therese Chambers, the regulator’s director of consumer investments, who delivered a speech at the Personal Finance Society’s Festival of Financial Planning.
Providing an example of this approach, Chambers revealed her department had identified a situation in a firm where there was existing and foreseeable harm to retail customers arising from an unusual term in the customer contracts.
“We have taken swift and assertive action to get the firm involved to stop and plan a redress exercise,” Chambers said.
“We are constantly challenging firms to consider their current practices through the lens of the Consumer Duty.
“I cannot emphasise enough that this is a different lens to what you have been used to and even though the rules are not yet in force it requires your active participation to understand the degree and extent of the cultural shift that it entails.
“A tick-box approach to detailed regulatory requirements will simply not be good enough as that will never be sufficient to answer the question of whether a firm has secured good outcomes for its customers.”
Turning to smaller financial advisers, Chambers added it is important to note that the expectations on firms of the duty were proportionate to the role of the firm.
“I know there are many smaller firms across the adviser population and many represented here today. It is very positive to see you all so focused on how to deliver in the best interests of your customers. But, regardless of size, we want all firms to be focused on the outcomes their customers receive.”