A new era is dawning for every company selling some form of regulated financial services at the end of July.
When the clock ticks forward to the first day of August, the new Consumer Duty will be in force.
At a glance, it does what most of us have been doing all along, putting clients and their interests first, from start to finish.
But there’s always room for improvement and we applaud the regulator for using its heft to crank up standards, the better to serve the market.
Suffice to say, I will not go into the (considerable) detail underpinning this step-change but seek to make a number of observations you may want to consider. (Incidentally, our colleagues in Punter Southall Law have been examining the finer points and it’s worth a read).
“Dear CEO” letters sent to every financial services sector. As you may remember from a previous post last year, these land on the doormat as a courteous but firm reminder to carry out your obligations as per the new regulatory landscape.
And as you will see, the scope and reach of the new duty is vast and so it should be, given the millions of customers whose interests it seeks to promote further in a vital part of the economy generating eight per cent of GDP.
Surely, change on this scale will not be without its challenges or pitfalls? I don’t think it’s going out on a limb to say that’s understating the totality of what lies ahead. Were we to try to grasp it metaphorically, we’d say it’s a shift which calls for a combination of tweezers and a blacksmith’s tongs.
Experience tells us that even the most diligent may be compromised even after the 12 months they’ve been given to prepare.
What does this have to do with a company specialising in historic loss calculation to support legal action? Re-reading that sentence, quite a lot.
In short, the risk of civil action or regulatory enforcement is not to be underestimated. Neither are the resources required to either defend against it or, indeed, to help to shape it.
Punter Southall Aspire and Punter Southall Law can help to ensure you are compliant from an operational and legal standpoint. Alternatively, if you suffer a loss as a result of another organisation’s failure to adopt this client-centred shift, calculating a remedy has always been at the centre of our expertise at Punter Southall Analytics.
In the end, this significant regulatory change will shine the spotlight more favourably on those companies which have made it their priority to demonstrably put clients first at every stage of interaction. For those who haven’t, the FCA’s focus will be less forgiving.