The FCA’s Consumer Duty has been around since July 2023, but many firms still cannot measure their engagement or distribution risks, let alone mitigate them.
We have created a suite of risks with the potential triggers for the various elements, along with potential consequences and typical mitigation strategies.
As with all our downloads, ‘+’ indicates Risk Navigator Membership or above, & ‘++’ Compliance Champion or above Membership.
Detailed Risk Management Documents
🔶 1. Products and Services +
Outcome: Products and services must be fit for purpose, meet the needs of the target market, and deliver good outcomes.
❌ Designing overly complex or unsuitable products for the intended target market
❌ Poor or absent product governance under PROD rules
❌ Failing to update product design as client needs or market conditions change
🔶 2. Openness and Honesty +
Cross-Cutting Rule: Act in good faith towards retail customers
❌ Misleading disclosures or withholding key risk information
❌ Glossing over performance issues or conflicts of interest
❌ Using aggressive sales or retention tactics that undermine trust
🔶 3. Avoiding Harm +
Cross-Cutting Rule: Avoid causing foreseeable harm to retail customers
❌ Inadequate identification and support for vulnerable customers
❌ Allowing poor value or unsuitable services to persist unreviewed
❌ Failing to monitor and act on poor client outcomes or complaints trends
❌ Offering execution-only services to clients who require support
🔶 4. Financial Goals +
Cross-Cutting Rule: Enable and support customers to pursue their financial objectives.
❌ Not assessing or recording customer objectives properly
❌ Failure to review and adapt services as client circumstances change
❌ Limited customer engagement or communication on progress towards goals
❌ Lack of performance reviews or rebalancing in managed accounts
🔶 5. Fair Price and Value
Outcome: The price paid by the customer must be reasonable relative to the benefits received.
❌ Charging fees that do not reflect the level or quality of service
❌ Bundling charges in ways that obscure value (e.g. platform fees + admin + performance fees)
❌ Not conducting fair value assessments annually
❌ Inadequate MI to detect clients receiving poor value
🔶 6. Transparency and Clarity
Outcome: Customers should be given the information they need, at the right time, and in a way they understand.
❌ Jargon-filled documents, complex disclosures or hidden charges
❌ Inaccessible communication for vulnerable customers
❌ Over-reliance on digital channels without alternatives for excluded groups
❌ Failure to test communications with real customers for understanding
🔶 7. Fairness to Customers
Principle-Based: Ensure fairness in treatment, access, and outcomes
❌ Disparities in service levels or costs across different customer segments
❌ Bias or discrimination in onboarding or complaint handling processes
❌ Favouring commercial objectives over customer interests.
❌ Not supporting customers in vulnerable situations fairly.
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