Published: July 2025
It’s now been almost two years since the Financial Conduct Authority (FCA) introduced the Consumer Duty regime — a key change in regulation that raises the bar for how firms serve their retail clients.
Consumer Duty is about more than just compliance. It’s about doing the right thing, making sure that the products and services offered by financial firms genuinely meet clients’ needs and that clients receive fair value, clear information, and the right level of support.
Since Consumer Duty came into effect in July 2023, with an extension to closed products in July 2024, many firms have been rethinking their processes, systems, and culture. It’s been a wide-reaching change — and one that’s still ongoing.
So, What Is Consumer Duty?
At the heart of Consumer Duty is a simple principle:
“A firm must act to deliver good outcomes for retail customers.” (FCA Principle 12)
This is underpinned by:
- Three cross-cutting rules, requiring firms to act in good faith, avoid foreseeable harm, and enable customers to pursue their financial objectives.
- Four key outcomes the FCA expects firms to deliver:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
In short, it’s about ensuring that clients get products that work for them, they receive clear and useful information and support when they need it, with fair value at every stage.
How are firms doing two years on?
The past two years have seen firms making real progress but also facing some challenges.
Positive steps we’ve seen:
- Products and services are being reviewed and, where needed, simplified.
- Client communications have improved
Ongoing challenges include:
- Difficulty gathering the right data to evidence outcomes, particularly for vulnerable clients.
- Embedding Consumer Duty consistently across all teams and departments.
- Technology constraints, especially with older systems, can limit how well firms track and monitor outcomes.
The FCA has acknowledged the work done so far, but it’s clear that ongoing improvement is expected — not just effort, but evidence of better client outcomes.
Regulatory Pressure Is Growing
Over the past year, the FCA has moved from education and support into active supervision. It has:
- Published reviews of how different sectors are implementing Consumer Duty
- Sent “Dear CEO” letters highlighting areas of concern, particularly around value for money and support for vulnerable clients
- Reaffirmed the importance of Board-level oversight and governance
So far, enforcement has been limited, but scrutiny is increasing, and firms are expected to evidence the outcomes they’re delivering.
A Key Role for Boards
The FCA expects that Consumer Duty isn’t just led by compliance teams, but is fully owned by Boards and senior management.
Each year, a firm’s Board must:
- Review and approve a Consumer Duty report
- Ensure Consumer Duty is embedded in strategy and culture
- Challenge where evidence of good outcomes is lacking
The FCA has said it may request these reports and will use them as part of its supervisory approach. This makes the annual review a valuable opportunity to reflect, challenge and improve, not simply a tick-box exercise.
What’s Next?
The extension of Consumer Duty to closed products in July 2024 has added another layer of complexity for many firms, particularly where data or client contact is limited.
Looking ahead, we expect:
- Closer scrutiny of pricing and fair value, particularly in digital or automated advice models
- Greater focus on outcomes for vulnerable clients, especially in a tougher economic environment
- Stronger enforcement where firms fail to meet the expectations set out
The FCA is also becoming more data-driven, meaning firms should be ready to demonstrate the outcomes they’re delivering through solid MI (Management Information) and clear reporting.
What we’ve been doing at MM Wealth
At MM Wealth, we’ve always put our clients central to everything we do, and the principles of the Consumer Duty align closely with how we already operate.
Over the past two years, we’ve:
- Embedded Consumer Duty into day-to-day operations, led by our Board of Directors
- Continued refining our MI and how we monitor outcomes, especially around service, value, and support
- Empowered our team, to raise questions and focus on what’s right for our clients
- Prioritised culture, making sure that our values and actions consistently align with what Consumer Duty asks of us
We don’t see this as a short-term project, it’s a long-term shift in how financial services works, and one that we welcome. It reinforces our commitment to transparency, value, and outstanding client service.
Looking Ahead
As Consumer Duty expectations evolve, so will the ways in which firms are assessed. For us, Consumer Duty isn’t about passing a test, it’s about always improving.
We’re continuing to build on what we’ve already done, and we’ll keep working to ensure that every client we work with receives the care, value, and clarity they deserve.
We are always here to help you with any questions or concerns you may have. If you would like to talk to one of our Chartered Financial Planners, please contact us on 01223 233331 or email info@mmwealth.co.uk.
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Disclaimer
Opinions constitute our judgment as of this date and are subject to change without warning.
The information in this article is not intended as an offer or solicitation to buy or sell securities or any other investment, nor does it constitute a personal recommendation.
