Aegon comments on the FCA’s New Consumer Duty latest consultation – https://www.fca.org.uk/news/press-releases/fca-introduce-new-consumer-duty-drive-fundamental-shift-industry-mindset
Steven Cameron, Pensions Director at Aegon said:
“The FCA is pushing ahead with its new consumer duty, which it describes as a ‘reset’ and ‘fundamental shift in industry mindset’. The aim of making sure firms have good customer outcomes at the heart of all they do is admirable and the latest paper adds more detail to FCA expectations. Running to 243 pages, half of which are taken up by draft non-handbook guidance, this illustrates just how complex and all-encompassing the new duty is. Helpfully, the paper recognises that in some sectors, embracing existing requirements for example around product governance, should meet certain aspects of the new duty, but the FCA is also quick to stress that firms must consider all current approaches against all new expectations.
“It is encouraging that the FCA has taken on board concerns previously raised. For example, cross-cutting rules no longer include a requirement for firms to take ‘all reasonable steps’, something which looked highly subjective and challenging. Instead firms must act reasonably to avoid foreseeable harm and enable and support retail customers to pursue their financial objectives. We also welcome the decision not at this stage to introduce a Private Right of Action alongside the new duty, which would have created further complexity and uncertainty.
“Final rules are expected by July 2022, with an implementation period running until April 2023. But even if firms do, as the FCA believes, have sufficient detail of proposals to begin implementation now, this timescale looks particularly tight bearing in mind the scope and sheer volume of other regulatory and legislative change. We welcome the FCA’s intention to work closely with firms throughout the implementation period and to identify where further good and poor practice examples might supplement draft guidance.”