The Financial Conduct Authority publishes Approach to Consumers paper, alongside Discussion Paper on Duty of Care

The discussion paper explores if there is a need for a specific duty of care requirement for firms in financial services.  It explores if a new duty of care could enhance good conduct and culture and provide additional protections for consumers.

If changes are required the paper asks what those changes could look like and what the impact would be for consumers, firms and the FCA.  It also explores what the possible alternative approaches to a new duty might be.

The Approach to Consumers sets out the FCA’s expectations, first published for consultation in 6 November 2017, on how consumers should be treated by financial firms and where the FCA will intervene if things are going wrong.  It gives a further insight into the wide range of powers the FCA has at its disposal to ensure consumers are protected, particularly some of the most vulnerable people in society. 

The paper sets out the FCA vision of what a well-functioning market looks like, when and how the FCA will act to protect consumers, and its policy positions on key issues.

Andrew Bailey, Chief Executive at the FCA, said:

'Consumer protection is absolutely central to the FCA’s purpose and Mission. Nearly everyone at some stage in their life will come into contact with a financial organisation and people need to know that they are being treated fairly and that the right protections are in place. Different groups of consumers have different financial needs, which will naturally change over their lifetime.'

'As we have demonstrated in the past we will act to address harm or potential harm using the range of powers and tools at our disposal to protect consumers. To ensure we provide the necessary protections and deliver good outcomes for consumers we need to regularly review our approach, so we can reflect the diverse population of the UK and consumers’ changing needs in a rapidly-evolving and increasingly complex environment.  The papers published today are part of this continuing work.'

When the FCA launched its Mission, it committed to publishing a series of documents that would explain its approach to regulation in more depth. These articulate how the FCA carries out its main activities, aiming to provide transparency to its thought process and decision-making.

The Financial Conduct Authority is asking stakeholders for comments on the Duty of Care paper by 2 November 2018.  We will also consult early next year on guidance for firms to help them understand more clearly our expectations and requirements for dealing with vulnerable people.

Notes to Editors

1. Approach to Consumers[1] document.
2. Approach to consumers document originally published 6 November 2017
3. Discussion Paper[2] on Duty of Care paper.
4. Financial Conduct Authority Mission[3].
5. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
7. Find out more information about the FCA[4].