To comply with the new duty, all financial products and services available to customers must have gone through processes to ensure they are suitable for, and distributed to, their target markets. Financial firms must also ensure their services and products provide fair value. Additionally, customer communications must be understandable and customers can expect support that meets their needs.
Financial enforcement expert Jonathan Cavill of Pinsent Masons said the new duty was an opportunity for businesses to build consumer trust. A survey published by the FCA last week found that just 41% of UK adults have confidence in the financial services industry.
“Firms have done a lot already to implement the duty, but this is a living piece of regulation. Today is just the start. The duty requires firms to implement an ongoing feedback and improvement cycle for all their products and services and to be pro-active in addressing issues,” Cavill said.
He added: “We expect the FCA to be actively looking at how firms have implemented and to be looking to take action where they are not satisfied with implementation efforts. From this point onwards, firms will also need to consider the duty in customer complaints they receive and the Financial Ombudsman Service will be able to look at the duty in complaints for conduct after today’s date.”