The FCA’s Consumer Duty comes into effect on 31 July 2023. It commits to higher standards of care and enhanced protections and “good outcomes for retail finance customers.” In an ever-complex market, the Consumer Duty has a single goal: to put the customers’ interests first.
By doing this, the FCA hopes to take some of the pressure off customer decision making and encourage financial services firms to genuinely consider the needs, personalities and objectives of their customers – including those with characteristics of vulnerability – and how they behave.
We’ve dived into everything you need to know about the Consumer Duty Act, so you can be confident and ready when it comes into effect.
What does it mean for mortgage brokers?
The Consumer Duty Act marks a big change, a major shift in expectations for mortgage brokers and anyone who runs financial services. The pressure moves to us. It’s on us to make the Consumer Duty work. It asks the industry to step up, deliver and prove how we’re supporting each customer with higher standards of care than we have before.
What are the changes for brokers?
This is a move to nurture public confidence in the financial services. When we all work to best practice, we build an industry our customers trust. Financial service firms are expected to monitor and prove their business is putting their customers’ needs first.
You should start to identify how your business provides:
At Optimus, we’ve been preparing for this change for a while and know how to support mortgage brokers in the transition.
What are the consequences for brokers not following the Consumer Duty Act?
As this is a trust-building initiative, the FCA will track, detect, triage and act on breaches of the act, so by not following the rules, regulations and process, mortgage brokers face fines.
Thankfully the FCA has given the industry a bit of time because although the Duty arrives on 31 July 2023, the FCA allows firms until 31 July 2024 to apply the duty to all closed products and services.
It’s a bit of breathing space, but that date will arrive quickly. Act now for a smooth transition.
Download our guide to the Consumer Duty Act:
