A closer look at the FCA's Consumer Duty
Writing for Professional Adviser, Commercial Advisory and Private Wealth expert, Malaika Jawed discusses the FCA's Consumer Duty.
Malaika explains, "at present, firms are bound by rules and principles to treat customers fairly. The post-Brexit Financial Services Act 2021 introduced a requirement for the FCA to consult on whether it should make general rules for authorised organisations to owe a duty of care to consumers. In the FCA’s proposals in CP21/13, it received a mixed response as to whether the new proposals for a Consumer Duty amounted to a duty of care.
"The new Consumer Duty is not intended to be a legally enforceable instrument, or amount to a duty of care when combined with a private right of action under the 2021 Financial Services Act, for example. Further, the new Consumer Duty does not intend to create and is not capable of creating a new fiduciary duty. Instead, the new proposals intend to set a higher standard of care for retail consumers and a new set of measures designed to protect consumers against harms suffered through investments, products and services provided within the financial markets."
To read Malaika's article in full which details exactly what the Consumer Duty will entail and what it means for consumers and providers, please click here (subscription required)
Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.