The Financial Conduct Authority (FCA) has emphasised that its Consumer Duty applies equally to services such as advice and distribution as it does to products.
The regulator also highlighted that insurers cannot be overly demanding from distributors when reviewing the effect of their policies.
Speaking on the FCA’s latest podcast, FCA manager of consumer policy outcomes Richard Wilson said this was because in his view, in the past there may have been a perception across the sector that governance and oversight only really applied to traditional sorts of products.
“Whereas, actually we want it to apply to services as well so, that can obviously include things like advice services, payment services, but also kind of just the ordinary sort of distribution services that firms are doing,” Wilson added.
‘Manageable and focused’ requests
Touching on insurer and other provider information requests from distributors to conduct regular product reviews, Wilson noted these must be “manageable and focused”.
“There is a need for firms to share information to support these reviews. In particular, distributor firms must provide information to support the reviews that the manufacturers are doing,” Wilson added.
But in general, the FCA does not expect distributor firms to share information without being asked though, as the information is to support a manufacturer review of a product or service,
“We expect the manufacturer firm to consider what information would be helpful and to take reasonable steps to gather it,” he continued.
“For example, a manufacturer could consider focus groups, including a few distributor firms, or sending out a survey to distributors to get the information they need. So, the aim is to help ensure that the information requests are manageable and focussed on the issues the manufacturer firm wishes to cover.
“We do not expect firms to share information about individual customers, obviously, particularly if that conflicts with data protection laws but firms should consider providing anonymised or aggregated information instead to avoid that, of course.”
