Nisha Arora, director of cross cutting policy and strategy at the FCA, said during a speech on Wednesday (1 November) that firms need to make sure they are "learning and improving continuously" and must be able to evidence this in their annual board report.
Three months since the initial 1 July deadline for implementation of the Duty, she said the FCA has seen some good practices and benefits for consumers.
One such benefit is firms reviewing their fees with fair value in mind, the regulator said. The FCA stopped short of naming the most high profile example of this in St James's Place, which recently overhauled its charging structure.
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Other positive changes include firms simplifying language in the letters they send customers and introducing more accessible formats. Firms are also being more upfront on their websites about exclusions so it is easier for customers to understand whether a product meets their needs.
Many firms have approached the Consumer Duty "in the right spirit", Arora said, using data and insights to put themselves "in their customers' shoes", to deliver the right outcomes and improvements to their products and services.
But she cautioned the Consumer Duty is not "a once and done event" where you can "tick the Consumer Duty box on your to-do list and move on".
It needs to "become part of who you are as a firm, your culture, and how you do business", from board to front-line delivery, from product design to communications and customer support, she said.
The regulator warned firms they have to embed customers' interests centrally in their culture and purpose, across strategy, governance, leadership and people policies, not just compliance.
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Arora said: "I would stress that firms who have not considered how they will monitor outcomes for different groups of consumers, including those in vulnerable circumstances, will need to do more to meet our expectations."
Firms need to make sure and be able to show the regulator they are delivering good consumer outcomes via their implementation plan, data and monitoring, internal assessments, and how they are preparing for the closed products deadline on 31 July 2024.
Under the Duty rules, at least once a year a company's board, or equivalent governing body, must review and approve an assessment of whether the firm is delivering good outcomes for its customers, and any evidence of poor outcomes.
This assessment will be part of the evidence the FCA uses to assess a firm's ongoing compliance with the Duty. Firms will need to be able to provide it, and the management information that sits behind it, on request.
"The Duty is not once and done. Firms' actions, assessments, testing and evidence need to be continuous," Arora said.
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Where the FCA discovers problems, "you can expect us to take robust action, such as interventions or disciplinary sanctions where needed", she added.
The rules of the Duty state firms should be "open and honest, avoid causing foreseeable harm", and support individuals to pursue their financial goals. Consumers should expect helpful and accessible customer support, so it is as easy to sort out a problem, switch or cancel a product, as it was to buy it in the first place.
But the FCA's latest Financial Lives survey found millions of people are regularly either unable to contact their financial services providers, or get the information or support they need from them.
Vulnerable adults, including those with low financial resilience, struggled in particular to get help, it found.