Dear CEO/Director | Release Date: 3rd February 2023
To read a longer summary of this Dear CEO/Director letter, click here.
To access the original FCA document, click here.
Short Summary
The Financial Conduct Authority (FCA) is emphasising the integration of the Consumer Duty within the Asset Management, Custody & Fund Services, and Alternatives portfolios. This marks a strategic shift towards more outcome-focused consumer protection and elevated care standards.
Implementation Timeline:
By October 2022: Firms agree on implementation plans.
By April 2023: Complete necessary outcome rule reviews.
July 31, 2023: Duty enforcement begins for all new and current products.
July 31, 2024: Enforcement extends to closed products.
Key Duty Applications: Applicable to firms interacting with the retail market, influencing customer outcomes, not limited to direct customer interactions.
Duty Requirements Overview:
Design products/services for specific target market needs.
Ensure fair value in pricing relative to consumer benefits.
Support consumer understanding through clear communication.
Provide ongoing consumer support matching their needs.
Expectations for Firm Integration:
Embed consumer interests deeply within corporate culture and strategy.
Focus on substantive compliance, ensuring readiness by the July 2023 deadline.
Prioritise effective implementations, avoiding superficial treatment of requirements.
Firms are urged to proactively adapt to these standards, ensuring that consumer protection is at the forefront of their operational and strategic agendas. This approach not only aligns with regulatory expectations but also enhances trust and sustainability in financial services.