The FCA published their second consultation on the proposed Consumer Duty on 7 December 2021 taking forward the majority of the proposals from the first consultation.
The IA supports the intention to ensure consumer harm is addressed and hopes that the consultation on the proposals will shine a light on those firms not meeting the spirit of existing rules. However, it is our belief that new rules cannot and should not replace effective authorisation, supervision and enforcement of those firms that are the cause of consumer harm.
There is no material change to the structure of the proposals, such that there will be a Consumer Principle, some cross-cutting rules and four outcomes for firms to consider. The Consumer Duty will apply along the distribution chain where a firm can influence material aspects of the design, target market or performance of a retail financial product or service.