However, firms were expected to have created an action plan, which needed to be signed off by their board by the end of October.
This requirement is the regulator’s attempt to make sure that firms do not waste time and reduce the risk of firms leaving the changes until the last minute. However, according to recent research carried out by MoneyHub, there may be trouble ahead for many of these firms.
The research found that only 22 per cent of firms believe that they are currently compliant with the new regulation, despite three-quarters (79 per cent) of FCA-regulated firms acknowledging the significant impact that the new consumer duty regulations will have on their way of doing business.
It is difficult to give an overview of what each individual plan should look like, as it will be different in every case.Further, 56 per cent of decision-makers at those firms in the latter tranche fear that their business is not prepared, nor do they currently have projects in place to become compliant ahead of the deadline. This is of real concern given that the FCA places significant emphasis on ‘getting it right first time’.
This gives the regulator greater scope to hold firms’ senior management to account if poor outcomes become apparent in the future, being that the requirement is on firms to demonstrate the reasonable steps they have taken to comply with the proposed consumer principle in their interaction with retail customers.
It is difficult to give an overview of what each individual plan should look like, as it will be different in every case. Factors such as a firm’s size, as well as the complexity of the work undertaken, need to be considered, and there are some challenging questions firms need to be asking themselves.
These difficulties will be further exacerbated for those firms still using legacy systems, as knowledge of their customers and their current and ongoing situation will be essential when implementing change.
Help is at hand
But help is available. For Pimfa members, we have developed a consumer duty microsite specifically to aid navigation through this new landscape. This includes an overview of the duty, a ‘key milestones’ timeline and the four outcomes that firms must consider, which set out detailed expectations of the firm/consumer relationship.
This is augmented by a comprehensive list of issues that firms need to be aware of and key actions that need to be taken, along with a list of resources supplied by our associate members, such as KPMG, Clyde & Co, Howden, PwC, Royal London and others, all providing a wealth of supporting material.
If your firm has missed the deadline, don’t panic, there is still time to get the help you need.The FCA itself has also published detailed information on their website for firms beginning their implementation journey, which is regularly updated to reflect the questions they receive.
This clearly shows how seriously they are taking this move from rules to outcomes-based regulation.
While many firms believe they are already customer-centric, the consumer duty will test the reality of this.
What is new and sits at the heart of the challenge firms face is a shift in focus towards actively assessing how and why their actions and processes are working to deliver the desired good outcomes for their retail clients and evidencing the decision-making process of how this is achieved.
If your firm has missed the deadline, don’t panic, there is still time to get the help you need. But you must do so now in order to submit your action plan as soon as possible.
Liz Field is chief executive of Pimfa
