On 9 December 2024, the Financial Conduct Authority (FCA) published a new webpage setting out its priorities under the Consumer Duty for the remainder of 2024/25.

Background

The FCA notes that, while affected stakeholders will largely be aware of these initiatives, it is setting them out in response to industry feedback that it would be helpful to show its Consumer Duty areas of focus in one place.

The webpage does not include firm-specific supervisory work or everyday supervisory work on the Consumer Duty. In choosing its focus areas, the FCA has prioritised initiatives where:

  • It believes sharing more information on good and poor practice and its expectations will benefit industry and help drive better outcomes.
  • It sees the greatest need to act to address harm (or potential for harm) due to the size or urgency of that harm. 
  • It requires more data to improve its understanding of the way the Consumer Duty is being embedded.

For each focus area, the FCA gives a short description of the work and expected timelines, noting that those timelines may change where, for example, it needs to prioritise new and emerging consumer harms. The areas will also be kept under review as pressures emerge on specific sectors or the industry as a whole.

The focus areas for the rest of 2024/25

There are 4 focus areas for the rest of 2024/25: embedding the Consumer Duty and raising standards, enhancing understanding of the price and value outcome, sector-specific priorities, and realising the benefits of the Consumer Duty.

Embedding the Consumer Duty and raising standards

The FCA explains that it has 3 cross-cutting projects to assess across sectors how firms are implementing and complying with the Duty, and it is grouping these into packages of publications in Q4 2024 and Q1 2025.

Enhancing understanding of the price and value outcome

The FCA notes that it wants firms to use robust analysis to assure themselves, and the FCA, that they are offering fair value, and identify and take action where they are not. 

Sector-specific priorities

Work is planned to tackle areas of existing concern in sectors across the rest of this financial year and into next. In particular:

  • Retail banking – the FCA plans to conduct work with a specific focus on bereavement and power of attorney, linked to its wider review of firms’ treatment of customers in vulnerable circumstances, which it plans to publish in H1 2025.
  • Consumer finance – the findings of the FCA’s “digital journeys assessment” are expected to be published in H1 2025.
  • Payments and digital assets – work to assess the clarity of pricing in money remittance services and account to account transactions is planned for 2025.
  • Consumer investments – as part of its advice guidance boundary review, the FCA plans to publish a consultation on high level proposals for targeted support in Q4 2024 and to consult on rules for better support for consumers in retail investments and pensions in H1 2025. Specific firm feedback and any necessary regulatory action to tackle poor identification of clients with characteristics of vulnerability by wealth managers is also planned for H1 2025. The FCA will also consult on draft rules to replace the PRIIPs regime in Q4 2024.
  • General and life insurance – findings on claims handling arrangements will be published in Q2 2025.
  • Sustainable finance – the FCA expects to publish final rules on extending the sustainability disclosure requirements (or SDR) regime to portfolio management in Q2 2025.

Realising the benefits of the Consumer Duty

Following its call for input covering the wider requirements on retail firms and asking where it can use the Duty to simplify them, the FCA plans to set out its next steps in H2 2025.