Consumer Duty update
Posted on 4th October 2022 at 13:29
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There is another deadline fast approaching for our industry and we need to be able to demonstrate we have a plan in place by 31st October 2022.
The new Consumer Duty rules supersede the old Treating Customers Fairly framework but have a more dynamic and proactive approach to the regulation
What is Consumer Duty?
This is taken from a document produced by the FCA “The Duty is made up of an overarching principle and new rules firms will have to follow. It will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.”
We the industry, the professionals are being asked to put ourselves directly into our client’s shoes, we have to imagine what it feels like to be our clients and the FCA is looking to us to ‘raise the bar’ in good practice and good client outcomes.
What will Consumer Duty focus on?
These newly introduced rules identify four key areas to focus on:
Price and Value, Product and Services, Customer Support and Customer Understanding.
For most of us in the industry, although this is a huge piece of transformative regulation, we welcome the new rules, especially those of us who have always had our customers at the forefront of everything we do.
What the Duty will expect of the industry and firms?
Avoiding any foreseeable harm, particularly with any behavioural biases, being aware of the client’s potential vulnerabilities and not disguising risks.
Being able to demonstrate a full understanding of the client’s interpretation of the products and services they are being sold, and providing timely and clear information that’s easy to understand helping the client to make informed decisions.
Easy routes to cancel or switch products and transparent fees removing what the FCA would see at ‘rip off’ charges.
The FCA are giving firms 12 months to implement the new rules for all existing and new products.
How will we improve our services to our clients?
Coloma Wealth has signed up to a platform called Moneyalive. This is an award-winning, regulatory technology video platform, which provides our clients with accredited, engaging and impartial educational videos. These will help our clients make informed choices about specific financial products and services available to them.
If you are interested in discussing your own financial planning, we would love to hear from you. Get in touch today for a free no-obligation meeting.
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