FCA Business Plan 24/25 – Consumer Duty focus

Our previous post covers the FCA's Business Plan for 2024/25 in overview and the work the FCA plans over the next 12 months to help deliver the commitments in its Strategy.

Unsurprisingly, the Consumer Duty is a key element of the FCA's aims and expectations. This includes a reminder that from 31 July 2024 firms need to ensure that both open and closed products are delivering the right outcomes for consumers (as we have explored further in a recent post).

Competition, not just protection

The Consumer Duty is naturally a part of the FCA's focus on protecting consumers, with the FCA stating that it will continue to test higher standards as the Consumer Duty continues to be embedded. 

Interestingly, the FCA also cites the Consumer Duty in relation to promoting effective competition. The Business Plan states that the FCA will identify where more effective competition can deliver fair value outcomes under the Duty. The Duty is intended to encourage firms to innovate, supporting growth and driving effective competition in the interests of consumers.

Intervention 

The Plan also announces:

• A review of firms’ treatment of customers in vulnerable circumstance as one of the key activities the FCA will start in 24/25. Please see our recent post here for a detailed examination of this issue. 
• The continuation of supervisory work to test firms’ implementation of the Consumer Duty and to improve firms’ delivery of good consumer outcomes. This includes complaints-handling and root cause analysis, consumer support journeys, consumer understanding, fair value and closed products and services. 

Otherwise, the Business Plan reiterates the FCA's message that it will continue to focus interventions where there is greatest risk of harm or where more work is needed by firms to identify and address gaps and to meet the higher standards of the Duty. This forms part of the wider Commitment to put consumers' needs first. 

Looking ahead

As expected, it therefore seems clear that the Consumer Duty will continue to be central to the FCA's overall approach and supervisory strategy, both as the closed products deadline approaches this summer and as firms continue to adjust to the Duty more widely. 

The Consumer Duty... represents a step change in our expectations of firms, with a significant focus on delivering good outcomes for all consumers.

https://www.fca.org.uk/publications/business-plans/2024-25#lf-chapter-id-commitments-4-13-