In support of the Financial Conduct Authority’s (FCA) flagship regulatory reform: the Consumer Duty, the Personal Finance Society (PFS) has created a good practice guide for personal finance firms.
The Consumer Duty began with a campaign by the Financial Services Consumer Panel to create a statutory ‘duty of care’ in January 2017.
Marking a crossroads in the way financial services works in the UK, there are not many new rules under the Consumer Duty – instead, it lists four outcomes, against which firms should judge their impact on consumers.
- Price and value
- Consumer understanding
- Products and services – making sure that products are designed properly for their target market
- Consumer support – for example, making sure that customers making a claim don’t face unnecessary barriers
Dr Matthew Connell, director of policy and public affairs at the PFS said, “In many ways, financial advisers have been at the forefront of care for their clients – there is no greater discipline for a professional than sitting in front of a client for an annual review and explaining how their investments have performed.
“The Consumer Duty recognises the unique position advisers have in assessing value for clients, saying “the adviser can often also have the clearest oversight of the customer’s overall position and an overview of the total proposition”’
“ Our good practice guide sets out the regulator’s expectations, and is designed to start a conversation about how advisers can discharge the Consumer Duty in a practical and achievable way.”