The Consumer Duty Alliance has produced a guide to help advisers get their consumer duty board reports ready for the July 31 deadline.
According to Keith Richards, founder and chief executive of the CDA, the three months until the deadline "will go quickly", and they will need to have their first annual board report ready and available on request to the Financial Conduct Authority.
He said: "For many firms, this is likely to be the first time they’ve had to produce such a detailed assessment of their strategies,
practices and client outcomes.
"There are ultimately business benefits to getting this right beyond compliance with an FCA deadline."
The CDA, which as FT Adviser revealed, launched in 2023 to help financial services companies comply with both the spirit and the letter of the consumer duty regulations, has therefore produced a guide together with regulatory consultancy Kroll and a panel of practitioners.
The guide, called Developing an effective assessment framework, contains practical information and is suitable for firms of all sizes.
It also recognises the FCA acceptance of relevant proportionality for small firms, which make up more than 80 per cent of regulated advice firms, and is designed to help those with responsibility for producing or contributing to their company's board report.
According to Richards: "The guide aims to help demystify what’s needed to produce a report and provide practical guidance.
"Firms should additionally consider consulting with their support service provider, or engage independent dedicated support from specialist consultants, such as Kroll."
In a speech in November 2023, the FCA commented the report will be part of evidence collected to assess a firms ongoing compliance with the duty.
The CDA believes there is a strong possibility the FCA will be asking for copies of the report from August 1 onward, making it all the more important that firms are fully engaged in preparation.
Among the subjects it tackles, the guide covers:
- How to prepare a firm for the report’s requirements, recognising proportionality for small firms.
- The key elements of the report
- What to include in an assessment
- How to structure the report so it is aligned with the FCA’s expectations and sector-wide good practice.
Sebastien Petsas, managing director of UK regulatory consulting at Kroll, called the creation of the guide an "important initiative".
He added: "We hope it provides practical assistance to firms when considering how best to meet this regulatory milestone.”
Later this month, May 28, the CDA will be hosting a webinar with Kroll that focuses on producing a board report.
The webinar will enable firms of all sizes to assess where they are in terms of their planning and preparation, and explore the structure of reports, areas of accountability, potential pressure points and how the board should respond in the face of evidence of poor outcomes.
