FCA's New Consumer Duty: Implications for Financial Advisers and CMP Curriculum

The FCA's Consumer Duty regulation has significant implications for how financial services are delivered. We examine what this means for practitioners and our updated curriculum.

The Financial Conduct Authority's Consumer Duty, which came into full force in July 2023, represents the most significant shift in UK retail financial regulation in a generation. For finance professionals working in or adjacent to retail financial services, understanding its implications is essential.

At its core, Consumer Duty establishes a higher standard of care that firms must deliver to retail customers. The Duty requires firms to act to deliver good outcomes for retail customers across four key areas: products and services, price and value, consumer understanding, and consumer support. This is a significant departure from the previous 'treating customers fairly' framework, which was more principles-based and less outcome-focused.

The practical implications are substantial. Firms must now conduct regular assessments of whether their products and services are delivering good outcomes for their target market. This requires robust data collection and analysis capabilities — a significant investment for many firms. The FCA has made clear that it expects firms to be able to demonstrate, with evidence, that they are meeting the Duty's requirements.

Finance professionals must now understand not just the technical requirements of the Duty, but also the analytical frameworks needed to assess product value and customer outcomes. This includes understanding how to conduct fair value assessments, how to design effective customer communications, and how to structure customer support processes.

The FCA has signalled that Consumer Duty will be a supervisory priority for the foreseeable future. Firms that fail to demonstrate compliance risk significant regulatory action, including public censure and financial penalties. For professionals working in compliance, risk management, or product development, deep knowledge of Consumer Duty is now a core requirement.

Looking ahead, there are indications that the FCA may extend Consumer Duty principles to wholesale markets, which would have significant implications for institutional finance professionals. Staying ahead of these developments will be essential for anyone operating in or around UK financial services.