Welcome to the March edition of the Corterum Newsletter. Time has flown, and we’re already a quarter of the way into 2024. The past month has seen significant activity on the side of the FCA, and we’re here to provide you with a comprehensive summary of what’s been happening. Read on to find out more!
Consumer Duty: The Art of the Possible in a Year
Sheldon Mills presented a compelling speech on February 20th, reiterating the aims and objectives of the Consumer Duty. He emphasized that the duty was created not just in the interests of consumers but also in the overall best interest of the economy. Drawing from feedback collected in their Autumn 2023 survey, Mills highlighted the serious consideration many firms are giving to the Duty. Notably, approximately 37% of advice firms have reviewed or changed their fee structure, signalling a positive shift towards fairer value on products. However, Mills cautioned that many assessments lacked solid data or credible evidence. He pledged greater scrutiny in the upcoming Board reports due in July to ensure firms are driving towards good outcomes. Mills also reminded that the Duty’s requirements will apply to closed products by the end of July. For more details, you can follow this link.
FCA Wants to Become More Aggressive with Its Enforcement
Therese Chambers delivered a poignant speech on February 27th regarding the FCA’s enforcement strategy. Chambers acknowledged a general feeling of dissatisfaction surrounding the fines, bans, and convictions imposed. To address this, the FCA aims to enhance the transparency and speed of investigations, starting with a new approach to publicizing enforcement investigations. Chambers stressed the importance of industry openness and renewed focus on the efficiency of investigations to minimize delays between misconduct and penalties. She concluded by emphasizing the need for industry and regulators to collaborate in combating opportunistic market abuse. You can read her full speech here.
FCA Review of Consumer Duty Implementation
The FCA conducted a survey to assess the implementation of the Consumer Duty, highlighting areas of good practice and opportunities for improvement. Key takeaways include a significant increase in firms reporting completion of required steps, with 43% reporting no difficulty in implementation. Most firms have identified their target market (74%) and appointed oversight personnel (73%). However, monitoring outcomes remains challenging, particularly for Payment Services Firms (41%) and Wealth Management firms (36%). From the survey results, thematic work will be conducted to address issues across multiple retail markets, followed by sector-specific interventions where necessary. The FCA will also intervene in cases where concerns arise regarding individual firms’ Duty implementation and customer outcomes. The survey results are available for download from the FCA website here.
Corterum’s Directors Report
With the July Deadline fast approaching, companies affected by the Consumer Duty will be expected to provide their board of directors’ assessment. Corterum offers comprehensive support in handling the entire process, from identifying potential action points to generating the report ready for submission. If you are in the position of being unsure of how to create your board report, then look no further. Our Consumer Duty module does everything needed at a very affordable cost. Should you wish to learn more, please don’t hesitate to contact us.
Trouble with understanding the needs of the SMCR and Consumer Duty?
Try these resources:
Ultimate Guide to Fit and Proper Testing
That concludes the March newsletter. Should you have any questions or require further assistance, please reach out to us
