We launched our Smarter Consumer Communications initiative to bring about a change in the way information is both communicated and delivered to consumers. Our publications are just one step in the journey that we hope to take with firms.
Durable medium
In response to feedback received by firms, we have clarified 'durable medium[1]' and also explain the origin and intention of the durable medium regime.
Read our two latest publications on Smarter Consumer Communications
Show FS16/10: Smarter Consumer Communications[2]
Show PS16/23: Removing ineffective disclosure requirements in the Handbook[3]
We believe consumer engagement can best be achieved through rethinking: not just what it is communicated, but also how it is communicated with consumers. Consumers are engaging with new communication technologies, leading to fast-changing habits and preferences. A predominately paper-based disclosure may not meet today's consumer information needs.
To deliver this, it requires a fundamental change in mindset about how to communicate effectively with consumers. The pace of innovation means that both firms and the regulators need to be able to adapt quickly to the fast-changing needs and expectations of consumers.
Our challenge is to ensure that regulation supports innovation and can keep pace with the market by responding quickly to new ideas and communication methods. Our overall ambition is to create an environment and regulatory framework where firms' communications encourage and enable informed consumer engagement and making decisions regarding financial products and services.
FS16/10: Smarter Consumer Communications
This Feedback Statement reports on the themes arising from the responses to our Discussion Paper on Smarter Consumer Communications[4] and sets out our planned work.
We examine the following issues:
- presentation of terms and conditions (T&Cs)[2]
- complexity of information provided to consumers at retirement[5]
- common terminology in the general insurance sector[6]
- cover offered by the Financial Services Compensation Scheme (FSCS) for specific products or services[7]
- raising consumer awareness of the Financial Ombudsman Service[8]
- transparency around the scope and cost of an investment advice service[9]
- cost transparency[10], and
- communication in asset management[11]
In the Feedback Statement, we also share same examples of approaches that firms are taking to communicate more effectively with their consumers. By showing these examples, we hope to encourage other firms to think differently and to consider not just the required message, but also the best means of communications.
In relation to our Handbook[-23], we focus on the following areas:
- providing information in a durable medium
- our projections regime
- our guidance on the use of social media
- risk warnings in radio advertisement, and
- annual percentage rates (APR)
Next steps
Good disclosure guides
Good disclosure guides
Consult on the publication
of good disclosure guides, including digital disclosure.
Smarter Consumer
Communications event
Smarter Consumer
Communications event
Host a Smarter Consumer Communications event to further engage with stakeholders on key issues, including terms and conditions.
Durable medium
Durable medium
Consider the use and definition of 'durable medium’ in the Handbook and consult on possible update.
Social media guidance
Social media guidance
Consider the issues raised around our social media guidance to identify innovative approaches that may address concerns especially around risk warnings.
Suitability reports
Suitability reports
Respond to the issues raised in the financial market advice market through FAMR. Work with Apfa and FOS to help the industry develop guidelines for preparation of suitability reports.
Investigate unhelpful
disclosure or risk warnings
Investigate unhelpful
disclosure or risk warnings
Investigate where firms provide unhelpful disclosure or risk warnings to consumers that reduce the overall effectiveness of communication.
Disclosure rules
Disclosure rules
Consult to change disclosure rules or accompanying guidance where barriers have been identified
PS16/23: Removing ineffective disclosure requirements in the Handbook
In October 2015, we consulted on proposals to remove ineffective disclosure requirements from our Handbook[13].
This Policy Statement summarises the feedback we received about the proposed changes to our rules. Based on the feedback we received, we have decided to proceed with our proposals to remove the rules or guidance around the following disclosures:
- The 'Consumer-Friendly Principles and Practices of Financial Management' (CFPPFM)[3]
- Short report[15]
- Initial Disclosure Document (IDD)/ Combined Initial Disclosure Document (CIDD)[16]
- Combined Initial Disclosure Document (CIDD)/ Services and Costs Disclosure Document (SCDD)[17]
Corrigendum
This version of the Policy Statement, removing ineffective disclosure requirements in our Handbook, replaces the one published on 11 October 2016.
Paragraph 1.14 on p.7 of the original document stated 1 February 2017 as the date when the changes to our Handbook set out in this Policy Statement would take effect.
In fact, the changes to our Handbook set out in this Policy Statement will take effect from 27 March 2017, except for the removal of the rules for short reports and the CFPPFM, which will take effect from 22 November 2016. The amendment clarifies the position.