In November 2015, the FCA published Consultation Paper 15/32: Smarter Communications: Removing certain ineffective requirements in our Handbook (CP15/32). In CP15/32 the FCA set out proposals to remove a number of disclosure requirements it considered to be ineffective in order to ensure consumers only receive meaningful disclosures.

The FCA has now published Feedback Statement 16/10: Smarter Consumer Communications (FS 16/10). In FS16/10, the FCA sets out examples of approaches firms are taking to communicate more effectively with their customers, as well as how the FCA’s rules on communication apply to digital and mobile solutions.

In terms of next steps, the FCA aims to create a regulatory framework that supports consumer communications that are clear and simple to understand, and encourage the use of new technologies to present things in ways that interest and engage consumers. In order to achieve this goal, the FCA intends to launch the following initiatives:

  • host a smarter consumer communications event to further engage with stakeholders on key issues, including terms and conditions;
  • consider the issues raised around the FCA’s Social Media Guidance through consumer testing to seek to identify innovative approaches that may address concerns especially around risk warnings;
  • consult on good disclosure guides, including digital disclosure;
  • consult to change disclosure rules, or accompanying guidance where they have been identified as barriers to smarter communications or innovations;
  • consider the use and definition of ‘durable medium’ in the FCA Handbook and consult on possible updates;
  • investigate instances where firms provide unhelpful disclosure or risk warnings to consumers that reduce the overall effectiveness of a communication; and
  • respond to the issues raised in the financial advice market through the Financial Advice Market Review. The FCA will work with the Association of Professional Financial Advisers, the Personal Finance Society and the Financial Ombudsman Service to help the industry develop guidelines for the preparation of suitability reports to make them more accessible for consumers and reduce the time firms spend preparing them.

The FCA has also published Policy Statement 16/23: Smarter Consumer Communications: Removing ineffective disclosure requirements in our Handbook (PS16/23). In PS16/23 the FCA reports on the main issues arising from CP15/32 and sets out final rules. The changes to the FCA rules set out in PS16/23 may be of interest to retail consumers who may buy or seek advice on investments, including with-profit insurance products, mortgages and general insurance products. The changes to the FCA’s rules generally come into effect from 1 February 2017 although some apply earlier from 22 November 2016.

View Feedback Statement 16/10: Smarter Consumer Communications, 11 October 2016

View Policy Statement 16/23: Smarter Consumer Communications: removing ineffective disclosure requirements in our Handbook,11 October 2016