“Once the July 2023 deadline for implementation passes, we expect the FCA to use these powers where it is concerned about compliance with the consumer duty,” she said.
“The duty turns much of the existing FCA guidance around the treatment of retail customers into more enforceable regulatory rules.”
Cody added: “The duty’s outcomes-focused approach also leaves considerable scope for interpretation by firms as to how they apply and, therefore, room for disagreement.”
The implementation period for the consumer duty lasts till July 2023 for new and existing products and then there's an additional year to July 2024 for back-book or closed products.
In that implementation period, firms need to undertake the value assessments of all their products using the data and evidence about whether they are fair value or if not, then make necessary changes to the price or structure of the benefits to ensure that customers do receive that fair value.
The FCA has said that it is planning a programme of supervisory and if necessary, enforcement work to ensure that firms have implemented the duty correctly.
sonia.rach@ft.com
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