In order for the FCA to be confident that firms will be in a position to comply with the new Consumer Duty from 31 July 2023 (for existing products), the FCA has outlined two interim deadlines that it expects firms to meet. These include a requirement for manufacturers to be able to share information on their products with distributors by 30 April 2023, and for a firm’s governing body (i.e. its Board of Directors) to have approved its implementation plan by 31 October 2022.

The FCA expects the governing body to challenge and interrogate their firm’s plan to implement the new Consumer Duty. For example, we have set out below 10 questions that we would expect a governing body to raise when considering their firm’s implementation plan:

1. Has the firm considered how its strategy aligns with the Consumer Duty proposals? What is a ‘good customer outcome’ for the firm in the context of its strategy?
2. Has the firm identified the appropriate senior managers to hold responsibility for Consumer Duty matters and manage relevant risks (which includes, but is not limited to, identifying the Consumer Duty Champion)?
3. How has the firm defined good outcomes (over the short, medium and long term)?
4. Has the firm considered the development of, or developed, a taxonomy to guide its implementation planning?
5. Has the firm considered which products / services are within and out-of-scope of the Consumer Duty? How have these conclusions been tested?
6. How will the compliance framework of the firm need to change to accommodate the Consumer Duty?
7. Has the firm scoped out what changes it will require to its product governance framework and processes?
8. Has the firm identified how it will map out its customer journey for each product and service?
9. Has the firm identified all of the customer information that it will need to review across the customer journey for its products / services?
10. How will the firm monitor and test whether it is achieving good customer outcomes?
11. How will the firm ensure that feedback and insights taken from different work streams on the Consumer Duty feed into other areas of the implementation plan?

In order to demonstrate that they have adequately challenged and interrogated the implementation plan, firm’s should ensure that the governing body’s discussion is appropriately captured in its formal record of the relevant meeting (e.g. Board minutes).

We have assembled a Toolkit to assist firms in meeting the FCA’s expectations for the approval of an implementation plan by 31 October 2022. For example, our toolkit includes specific documents, such as: (i) training to assist on upskilling a firm’s governing body on the Consumer Duty requirements, (ii) an extensive checklist to assist in the challenge and interrogation of a firm’s implementation plan, and (iii) guidance notes to assist the sponsor team in preparing and then presenting the plan to the firm’s governing body.

Register here to receive more information on our Implementation Toolkit.