Inside FCA Podcast: Explaining the Consumer Duty consumer understanding outcome [pdf]

The Financial Conduct Authority (FCA) has published the transcript of another podcast relating to the new consumer duty. Specifically, this time the transcript includes an interview with the FCA’s Head of Consumer Policy Outcomes, Mr. Richard Wilson, concerning the „consumer understanding outcome“ of the new duty which relates to the objective of providing consumers with sufficient information about the products and services they receive to make informed decisions.
Mr. Wilson thereby describes, among other things,
– what is meant by „consumer understanding outcome“ from the regulator’s point of view;
– how the new „consumer understanding outcome“ requirements fit into existing product disclosure obligations;
– what is meant by customer tailored communications and what this implies for firms;
– when the new „consumer understanding outcome“ comes into force;
– the difference in product or services information supplied in face-to-face setting versus in online marketing settings;
– the factors that shall be considered when testing consumer understanding of a product or service;
– the regulator’s expectations as regards the frequency and documentation of performing such consumer understanding tests;
– the regulator’s expectations in this context taking into account a firm’s size (proportionality principle); and
– the supervisory approach of the FCA to determine whether or not a firm is meeting its new „consumer understanding outcome“ requirements.