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Corterum Newsletter: May 2024

Welcome to May’s edition of the Corterum Newsletter. This month sees new initiatives from the FCA, plus updates on the Consumer Duty Board Report. Read on to find out more:

FCA Plans to Name and Shame Firms Currently Under Investigation

The Financial Conduct Authority (FCA) has proposed a controversial plan to “Name and Shame” firms currently under investigation. This move, aimed at increasing transparency, has sparked backlash due to concerns over reputational damage, especially if the firms are later proven innocent. The debate has escalated to the point where UK Chancellor Jeremy Hunt has expressed his objections. Although the FCA operates independently of the government, it is influenced by government direction. Recent discussions have considered a compromise where the FCA would announce investigations and associated issues but anonymize the firms involved. Whether these changes are seen as controversial or justified, they indicate the FCA’s intention to enhance compliance efforts across the industry.

Closed Book Products to be Included in Consumer Duty

With just over two months remaining until the Consumer Duty Director’s report is due, advisers are reminded that reporting on closed book products will soon be part of consumer duty requirements. “Dear CEO” letters sent this month emphasize these requirements. Closed book products, such as mortgages and vehicle insurance that are no longer available for new customers but can be renewed by existing ones, need to be reported. The FCA acknowledges that some firms may have few or no customers with these products but has issued these reminders to help firms better understand their distribution chains.

Only 34% of Firms Confident in Delivering Consumer Duty

An independent survey conducted by Tenet Compliance Services (TCS) reveals that only 34% of firms are confident in their ability to accurately and effectively report on their Consumer Duty obligations. The survey, which included 134 firms, contrasts sharply with the FCA’s own more optimistic surveys. This lack of confidence ahead of the end-of-year board report could pose challenges, and it will be interesting to see how the FCA responds to these reports in July.

Trouble with understanding the needs of the SMCR and Consumer Duty?  

Try these resources:

SMCR Implementation Guide

Consumer Duty 2-Pager

Ultimate Guide to Fit and Proper Testing

That concludes May’s Newsletter! Should you have any inquiries or require assistance, please don’t hesitate to reach out. We’re here to support you in navigating the complexities of compliance.