Consumer Duty implementation plans

The Financial Conduct Authority, FCA, has published a press statement to present the key findings from a review of the implementation plans as regards the new consumer duty of „larger fixed firms“ with dedicated FCA supervisory teams. The purpose of the publication is to help firms understand the FCA’s expectations in this context and to „implement the Duty more effectively“.
The key findings are briefly noted below:
– the implementation plan of firms often lacked oversight and the assignment of responsibilities;
– some Boards of Directors weren’t even involved in the plans despite the fact that the plans were adopted by the Boards (often without discussion);
– the implementation plans were often vague, not detailed enough to transpose corresponding requirements;
– many times, there weren’t any deadlines assigned to the tasks in the plans;
– many firms did not or insufficiently consider the implications of the duties upon a firm’s business culture (what needs to be done in terms of embedding the new consumer duty in a firm’s business culture, e.g. via the implementation of corresponding incentive policies);
– several firms failed to conduct proper gap analysis between current practices and the ones required under the new consumer duty;
– firms also often failed to identify dependencies among departments, units, or third parties when transposing the requirements;
– many firms still have not identified what it means to their businesses to „deliver good outcomes“, let alone have determined any changes that would need to be made to their business practices;
– few firms so far have identified specific product and / or services that need to be reviewed to ensure compliance with the new consumer duty; and
– some firms have not yet made plans for the internal supervision of compliance and the data needed to evaluate such compliance.
As these are only the key shortcomings identified during the review, please refer to the original document for more detailed, comprehensive information.
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In order to improve firms‘ implementation plans and enhance their engagement with the upcoming duty, the FCA has also outlined its key expectations and some „good practices“ it has observed in the above noted areas. Finally, the FCA states that it expects firms to closely review the findings and identify any action needed on their part to become prepared for the new consumer duty.