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Dear CEO/Director | Release Date: 3rd March 2023

To read a shorter summary of this Dear CEO/Director letter, click here.

To access the original FCA document, click here.

Long Summary

The Financial Conduct Authority (FCA) has issued an essential update to mortgage intermediaries on integrating the Consumer Duty into their operations. This shift is aimed at reinforcing consumer protection by adopting a more outcomes-focused approach.

Implementation Timeline

The FCA has outlined specific deadlines for the implementation of the Consumer Duty:

End of October 2022: Firms should have finalised their implementation strategies.

End of April 2023: Manufacturers must complete necessary reviews and communicate essential information to distributors.

31 July 2023: The Duty becomes applicable for all new and renewed products and services.

31 July 2024: The Duty extends to closed products or services.

Scope and Application

The Consumer Duty targets all firms within the mortgage intermediary sector, emphasising the significant influence these firms have over customer outcomes. This broad application ensures that both direct and indirect relationships with customers fall under the Duty’s purview.

Key Requirements

The FCA’s Finalised Guidance from July outlines the primary requirements of the Consumer Duty, focusing on:

Customer Outcomes: Firms must act in good faith, prevent foreseeable harm, and support customers in achieving their financial goals.

Product and Service Design: Offerings should meet the specific needs, characteristics, and objectives of targeted customer segments.

Value and Pricing: There should be a reasonable balance between the cost to the consumer and the benefits received.

Communication and Support: Firms should facilitate consumer understanding through clear communication and provide ongoing support tailored to consumer needs.

FCA’s Expectations

Mortgage intermediaries are expected to critically evaluate their current practices against the heightened standards introduced by the Consumer Duty. This involves:

Strategic Design and Operation: Ensuring services are effectively tailored to the needs of the target market.

Fair Value Analysis: Analysing and justifying the cost-benefit ratio of their offerings.

Enhanced Communication Strategies: Providing comprehensive, clear, and timely product information to consumers.

Robust Consumer Support: Establishing systems to address consumer queries and issues throughout the service lifecycle.

Feedback on Implementation Plans

Recent feedback from the FCA highlights that while many firms are aligning well with the new requirements, some are behind, risking non-compliance by July 2023. Key focus areas include:

Prioritisation of Tasks: Firms need to prioritise implementation tasks based on the potential for consumer harm.

Deep Integration of Duty Requirements: Firms should thoroughly integrate Duty requirements into their operations.

Collaboration: Effective collaboration with other firms in the distribution chain is crucial for timely compliance.

Supervisory Strategy and Future Actions

The Consumer Duty is integral to the FCA’s strategy, emphasising the setting and testing of higher standards through 2025. The FCA plans to actively supervise the integration process, with ongoing assessments and support to ensure firms fully embed the Duty into their practices. This includes direct engagements, collaborations with trade bodies, and industry events.


The implementation of the Consumer Duty within the mortgage intermediaries sector marks a pivotal shift towards enhancing consumer protection. Firms are urged to undertake thorough reviews of their operations and make necessary adjustments to comply with the new standards. The FCA will maintain a rigorous supervisory approach to ensure compliance and address any discrepancies in firm practices. This regulatory update underscores the commitment to fostering a fairer, more transparent, and consumer-focused financial market.

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