The Financial Conduct Authority has warned that it will crack down on firms who ignore the Consumer Duty or who pose the most harm.
Sheldon Mills, executive director of consumers and competition at the FCA, warned its supervisory and enforcement approach will be proportionate to the harm or risk of harm to consumers with a sharp focus on outcomes.
Mills said: “We will prioritise the most serious breaches and act swiftly and assertively where we find evidence of harm or risk of harm to consumers. In some cases, firms can expect us to take robust action, such as interventions or investigations, along with possible disciplinary sanctions.”
Mills also acknowledged the work many firms have undertaken to implement the Duty and noted how it could boost competitiveness of the financial services sector.
“The 52 million financial services consumers in the UK rely on the sector to deliver good outcomes and should be even better protected from harm, particularly in these challenging economic times.
“The Duty will help the UK financial services industry remain world-leading proponents of financial services as firms have to think harder about innovating and competing to find better ways to serve customers. If applied correctly by firms, the Consumer Duty should help firms retain and attract customers and will enhance the competitiveness of our financial services sector,” Mills said.
To support firms, the FCA has shared findings from its review of firms’ fair value assessment frameworks, highlighting good practice and areas for further consideration. The review found that while firms had carefully considered the FCA’s price and value requirements, some firms have more work to do to meet the rules.
The watchdog has set out four key areas for firms to focus on which include collecting evidence that demonstrates products represent fair value and having clear oversight of actions to take if products do not provide fair value.
