As with most regulation, however, it might not be quite that simple.
Recently the Financial Conduct Authority has been quite clear that the consumer duty provides a “new lens” through which to look at your investment proposition.
The regulator is clearly going to want to see evidence for the steps you have taken
The consumer duty regulation is clear, and advisers will need to understand exactly what that means for their propositions and how they can ensure that they meet the new requirements.
The good news is there is practical guidance advisers can lean on to ensure that you meet the new requirements. The consumer duty has been built around three “cross-cutting rules” and four outcomes.
So, one approach you could take might be to consider each of the four outcomes and how you might meet them in relation to your investment proposition.
The aim of this outcome is for you to provide evidence that your investment proposition is appropriate for your target market. You may want to consider these areas:
This outcome requires you to demonstrate that investments represent good value. In considering this, focus on what the client is paying for. A cheap but poorly diversified income solution is equally likely to fail the value test as a more expensive active solution.