FCA’s New Consumer Duty

FCA’s New Consumer Duty

You’ve probably heard or read about the new Consumer Duty and possibly bemused by the constant use of the term “good consumer outcomes”. That’s because the new Consumer Duty is coming to town.

Treating Customers Fairly started in 2006, was rebadged Fair Customer Outcomes in 2014, now we have the new Consumer Duty. Similar messages but a different tag.

The FCA has identified that retail firms, i.e. – mortgage brokers, IFAs and retail advising firms – are not prioritising good customer outcomes.

Customers are not given the information they need to make good decisions and are sold products and services that do not offer the benefits they might expect. As always it’s the few that cause the issue for the majority of us. However, the FCA is now taking action.

The aim of the FCA’s new Consumer Duty is therefore to ensure that:

  • Firms consistently place consumers’ interests at the centre of their businesses.
  • Firms stop merely adhering to rules and details rather than entering into the spirit of compliance.
  • Competition is enhanced as firms promote their high standards and good consumer outcomes.
  • Consumers get products and services which are fit for their purpose, provide fair value, that they understand how to use. Something we all do and should have done from day one.

FCA Consultation

The FCA’s first consultation included:

  • a new Consumer Principle to provide an overarching standard of conduct.
  • a set of cross-cutting rules.
  • outcomes that support the new Consumer Principle by setting expectations for firms in terms of their cultures and behaviour.

The New Consumer Principle

The Consumer Principle will replace two of the FCA’s Principles for regulated firms:

  • Principle 6 – a firm must pay due regard to the interest of its customers and treat them fairly; and
  • Principle 7 – a firm must pay due regard to the information needs of its clients and communicate information to them in a way that is fair and not misleading.

Under the new Consumer Duty, firms must put themselves in customers’ shoes when communicating and designing products.

Cross-cutting rules

Three cross-cutting rules underpin the new Principle. Firms must:

  • Act in good faith towards retail customers.
  • Avoid foreseeable harm to retail customers.
  • Enable and support retail customers to pursue their financial objectives. 


The FCA expects to see good outcomes in four areas:

  • products and services
  • price and value
  • consumer understanding
  • consumer support. 

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