Unsurprisingly, when asked recently what I felt was going to be one of the key areas for advisory firms – in fact any regulated firm – to focus on in 2023, I was immediately drawn to the Consumer Duty.
That feeling was cemented even further in my mind when I saw the recent ‘Multi-firm review: Consumer Duty implementation plans’ document which detailed its view on the implementation plans it reviewed and what it believes were good and bad examples.
I would advise you to give the review a once over – you can find it here – because it will provide some enlightenment on the FCA’s expectations and whether they are currently being met, and crucially, will they be in place by the 31st July this year when the rules come into force for new and existing products/services that are open to sale or renewal.
As an aside, this was a review of larger firms’ plans – those who have a ‘dedicated FCA supervision team’ – because, quite rightly, it feels these firms are liable to have a bigger impact on consumers and markets.
However, the findings are relevant to all.
The big result focuses on firms simply not being up to speed or on track to implement the changes they say they need to.
Effectively, this is a regulatory call to ‘get a move on’ – six months isn’t a lot of time and the regulator wants firms to prioritise this work, carry it out, and collaborate with other partners and stakeholders to ensure they are all ‘delivering good customer outcomes’.
This is such an important part of the FCA’s ongoing workstream – arguably the most important over the last five years or so – that firms have to expect a considerable amount of intervention from the regulator in order to make sure it ‘lands’ correctly.
That means I anticipate regular communication along these lines over the next few months particularly because it will feel that firms need to be carrying out the work right now in order to meet the responsibilities that come with Consumer Duty.
In that sense, there really is no time like the present to get your Consumer Duty house in order.
One of the other apparent bugbears from the review is firms suggesting they could achieve Consumer Duty compliance simply by running ‘business as usual’.
That, I’m afraid, is clearly deemed not to be sufficient to satisfy the regulator.
Your implementation plan – which should have been completed last year – should set out the changes you intend to make and what you will be achieving by making them.
My advice therefore is to take advantage of every single bit of support and guidance you can get in this area in order to satisfy yourselves and the regulator, that you are not just on the right path now, but to show how it leads you to the 31st July destination.
Paradigm is running a series of face-to-face events right across the country over the first half of the year and every single one of them will take a detailed look at firms’ Consumer Duty responsibilities, focusing specifically on the ‘price and value’ outcome that is required within the new rules.
We have two of our experts – Graeme Steward and Christine Newell – who will be presenting and will be there to answer your questions on any matters relating to how your go about implementing Consumer Duty, and how you detail what you have done, the changes it has meant in your business, and the positive outcomes for consumers it will deliver.
Plus, if you need bespoke support, we have a national team of compliance consultants, based right around the country, who are able to visit firms, help with, build and bring to life your implementation plan.
Be in no doubt that this really can’t be brushed under the regulatory carpet in the hope that what you have is already enough.
The FCA has too much riding on this to allow that to happen, and my own expectation is that it will want to make its mark on non-compliant firms very early after the implementation date.
Now is the time to make sure your firm is not one of those.
Bob Hunt is Chief Executive of Paradigm Mortgage Services
