Firms unprepared for FCA’s Consumer Duty deadline, warns Bovill

Firms unprepared for FCA's Consumer Duty deadline, warns Bovill survey

With the Financial Conduct Authority’s (FCA’s) Consumer Duty deadline just 50 days away, almost half of firms are unsure about the implementation timeline, a new Bovill survey indicates.

The regulatory consultancy found that the concept of ‘fair value’, one of the four key outcomes, is proving particularly challenging, with 64% of firms identifying it as the toughest aspect.

Interestingly, despite the urgency of the matter, around 44% of firms could not estimate how long it would take to implement ‘fair value’. These findings are concerning given that product manufacturers are required to finalise all reviews needed to meet the outcomes rules by the end of April. The final deadline for implementation is set for July.

The FCA, after reviewing 15 firms’ fair value assessment frameworks, found some firms falling short in evidencing how they deliver fair value to customers. Additionally, there is a need for a more granular approach for products and services spanning various market sectors.

The Consumer Duty regulation applies to all firms that influence retail outcomes, including for SME customers, with the objective of ensuring good outcomes in price and value, among others. As per Bovill, this deadline has pushed many firms to invest significantly in implementing the Duty.

Bovill Partner Mark Spiers said, “The level of change needed to implement the Consumer Duty will vary from firm to firm, however it is a very wide-ranging piece of regulation and many still have a lot of work to do before the deadline. This is a large piece of work and the greatest challenge for many firms is the uplift required, and the substantial investments that they are having to make in their capabilities to ensure they are compliant.”

He further noted, “Firms will need to keep their fair value assessments under continual review. Fair value is a moving target, and firms must continue to deliver it when circumstances change. Distributors need to think carefully about what data and information they need from manufacturers, so that they can be sure of consistently good outcomes over the product, service and client lifecycle.

“Bovill’s toolkit can help firms put the correct measures and methodologies in place ahead of the deadline, which in turn will allow them to ensure their products and services continue delivering for consumers.”

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