Consumer Duty

Consumer Duty is the FCA's higher standard of care for retail financial services firms, introduced for new and existing products on 31 July 2023 and extended to closed-book products on 31 July 2024. It replaces and consolidates parts of TCF (Treating Customers Fairly) and imposes materially tougher requirements on how firms market, sell and service retail products.

The Duty has three components. A new Consumer Principle ("a firm must act to deliver good outcomes for retail customers"). Three Cross-cutting Rules (act in good faith, avoid foreseeable harm, enable the customer to pursue their financial objectives). Four Outcomes (products and services, price and value, consumer understanding, consumer support).

For UK financial adviser marketing, Consumer Duty has six operational implications. First, every financial promotion must evidence that it is consistent with the firm's target market and does not cause foreseeable harm; "clickbait" headlines and exaggerated return claims are non-starters. Second, every product or service must have a documented fair value assessment, refreshed annually. Third, consumer understanding tests ("would a reasonable target-market customer understand this?") apply to landing pages, lead-gen copy, email nurture, suitability reports and fee disclosures. Fourth, vulnerable-customer considerations run through every marketing journey, which requires accessibility testing, plain-English copy, and a clear escalation path for customers who indicate vulnerability. Fifth, data on customer outcomes must be collected, monitored and reported annually at board level. Sixth, principals and SMF-approved individuals are personally accountable.

The Duty is enforced through FCA supervision, skilled-person reviews (s.166), enforcement action and, post-incident, FOS redress. Firms with weak Duty evidence face materially higher complaint-upheld rates.

See also: financial promotions, fair value assessment, vulnerable customer, SMCR.