What does Consumer Duty mean for you?

On 31st July 2023, the Financial Conduct Authority (FCA) introduced a new set of rules called Consumer Duty. The aim of these rules is to set a higher standard of consumer protection across the UK financial services sector and with it raise the standards of how FCA-regulated firms treat customers and ensure they receive ‘fair value’.

It’s not an entirely new concept as it builds upon both ‘Treating Customers Fairly’ (TCF) and ‘Product Intervention and Product Governance’ (PROD), which were introduced by the FCA in 2006 and 2018 respectively. But it means firms can no longer simply satisfy prescriptive regulatory requirements and must instead consider and demonstrate how they are delivering good outcomes for their customers.

There are four ‘outcomes’ Consumer Duty is seeking to improve, which are products and services, price and value, consumer understanding, and consumer support. For FCA-regulated financial advice firms, this means introducing or evolving their practices to ensure their clients are receiving communications they can understand, using products and services that meet their needs and offer fair value. It also means getting the support they need, when they need it.

Here at Niche, our clients are already at the heart of our thinking and the introduction of Consumer Duty means a continuation of our customer-centric culture and consumer-friendly practices. For example, our clear and transparent fixed fee model allows you to fully understand what you will be paying for and how much you will be paying from the very beginning.

Another example is our deliberate use of ‘plain English’ and avoidance of jargon within the Suitability Reports we create. This demonstrates how we try to make things as easy to understand as possible, so an informed decision can be made. Plus, we also use technology to produce visual graphs which complement the ‘plain English’ and further demonstrate why a recommendation is appropriate for you and your specific goals.

Although these examples are relatively simple, they do provide an indication of how we think and operate. Of course, we will always be seeking to improve our own standards and processes to ensure you receive a great service and the very best outcomes, but we do this because it is the right thing to do and not because of the expectations of Consumer Duty.

So what does the introduction of Consumer Duty mean for you? In a nutshell, it is likely that how FCA-regulated firms engage and communicate with you will evolve. And with regards to Niche specifically, we will keep you at the heart of our thinking and work towards improving the service we provide even further.