Firms must get familiar with FCA's consumer duty changes

Advisers must familiarise themselves with the Financial Conduct Authority's proposed clarifications to the new consumer duty rules, Aegon has warned.

In the FCA's quarterly consultation, chapter 8, the regulator has put forward some changes to the consumer duty rules to clarify the intention behind them. 

The consultation, which closes on January 9, contains what Steven Cameron, pensions director at Aegon, has called "very specific and detailed" clarificatory changes to the consumer duty rules, which were published last year in the FCA's FG22/5: Final non-Handbook Guidance for firms on the Consumer Duty.

While Aegon will not be responding to the quarterly consultation - and "does not expect adviser firms to want to", Cameron said: "Advisers should familiarise themselves with the changes in case they affect them.

The main thing we want you to have in mind in terms of the implementation of the duty is, please take this seriously.Therese Chambers, FCA

“Chapter 8 of the quarterly consultation proposes ‘clarificatory’ changes to new consumer duty rules to make sure they deliver as intended. These are very specific and detailed and primarily make sure the rules apply as we might have expected.

"The biggest surprise for me was the clarification that the new duty can apply if a regulated firm is providing services which can materially influence outcomes for defined benefit as well as defined contribution scheme beneficiaries."

He said this 'surprise' showed yet again just how wide reaching the new duty is.

Cameron added: “This is one example of further material to look out for. Another is the portfolio strategy letter for financial advisers and intermediaries.

"This made reference to the new duty in terms of the appropriateness, cost and fair value of ongoing services and also explained that the higher standards of care mean many firms will require a significant shift in culture and behaviour."

The biggest surprise for me was the clarification that the new duty can apply if a regulated firm is providing services which can materially influence outcomes for defined benefit as well as defined contribution scheme beneficiaries.Steven Cameron, Aegon

The other proposed changes in the latest quarterly consultation paper are: