The Financial Conduct Authority (FCA) have today (27-July) issued their final policy statement for their new Consumer Duty. The Duty is intended to give clearer standards to FCA regulated firms to ensure consumers receive better outcomes when acquiring financial products and services. The FCA also aims for the Duty to increase competition in the financial services market with the expectation it will drive innovation and better value for consumers. The Duty will apply to all firms, both large and small, that ‘manufacturer’ or ‘distribute’ financial services, including motor retailers.

What is the new Consumer Duty

The Consumer Duty consists of three elements: -

What is the new Consumer Duty

The Consumer Duty consists of three elements: -

  1. The new Consumer Principle, which will require firms to deliver good customer outcomes
  2. Cross Cutting Rules, which will give more clarity on the expectations placed on firms by the Consumer Principle. These rules are: -
    • Act in good faith
    • Avoid causing foreseeable harm
    • Enable and support retail customers to pursue their financial objectives
  3. Four Outcomes, which are what the FCA wants firms to help consumers achieve when they procure a financial product and service. The outcomes are: -
    • Products and Services
    • Price and Value
    • Consumer Understanding
    • Consume Support

The FCA will measure the success of the Consumer Duty in terms of the Outcomes and whether firms are receiving suitable products and services at a fair value; and that they are receiving the appropriate support and information to make an informed decision about the products and services they are buying. The FCA are also expecting to see more confident consumers who are properly equipped to make the right decisions for themselves.

The Duty will require significant cultural and behavioural shifts in firms and the FCA will be making amendments in the Senor Managers and Certification Regime (SM&CR) to support this.

The FCA are very aware of potential unintended consequences of the Duty in particular the withdrawal of products from the market and the ceasing to offer other products to higher risk consumers. The FCA will monitor the market to ensure this does not happen and have not included the Private Right of Action (PROA) as part of the Duty to help address this problem too.

The FCA believe supervision and monitoring will be key to the success of the Duty and will review firms compliance through implementation and once it is in place. The FCA have also committed to reviewing the Duty once it is in force to ensure it is effective.


The implementation date for the Consumer Duty is to be 31 July 2023 for all new products and 31 July 2024 for existing ones. Firms will be expected to have agreed implementation plans by the end of October 2022 and will have to be able to evidence this if asked. The Duty is not to be retrospective and will only apply going forward. The FCA are working closely with the Financial Ombudsman Service (FOS) to ensure a smooth transition.

The FCA have produced non-handbook guidance to assist firms to implement the Duty. This guidance will be regularly reviewed and updated overtime to ensure it remains appropriate and useful.

The NFDA will also be producing guidance and resources to assist motor retailers with the implementing of the new Consumer Duty.