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Consumer Duty implementation: FCA reviews firms' plans

Ahead of the introduction of the Consumer Duty, due to come into force on 31 July 2023 for new and existing retail products and services, the FCA recently conducted a review of firms’ plans to embed compliance with the Duty into their businesses. It has now published the findings.

While acknowledging that many firms are making good progress with their implementation plans, the FCA emphasised that some are lagging behind. Three key areas were identified where firms should focus their attention in this implementation period. The FCA also set out examples of good practice, as well as areas for improvement.

Walker Morris consumer finance expert Jeanette Burgess discusses the findings. Please don’t hesitate to contact Jeanette should you need any advice or assistance with your own implementation plans.


Why is this important and who does it apply to?

The results of the review will be of interest to all regulated firms in scope of the Consumer Duty; all firms that deliver retail products or services to consumers, or that have a “material influence” over the design, distribution, and preparation of retail products or services. This means that wholesale firms may come within scope if they exercise a material influence over any of the stages in the retail product or service supply chain.

The FCA emphasises that it expects firms to consider the review findings when developing their own implementation plans, and so firms should pay close attention to the points set out below.

Please see our earlier briefing for more information on the Consumer Duty and its substantive requirements.

Three key areas to focus on now

While acknowledging that many firms are making good progress on shifting the focus to consumer outcomes, and embedding compliance with the Consumer Duty in their business, the FCA highlighted that some are lagging behind with their implementation plans. The regulator identified three key areas where it believes firms should particularly focus their attention in the lead up to 31 July 2023:

  • Effective prioritisation: Firms should make sure they can justify which implementation work they choose to prioritise. They should focus on reducing the risk of poor consumer outcomes, and assess where they are likely to be furthest away from the Duty’s requirements.
  • Embedding the substantive requirements: Firms should consider the substantive requirements of the Duty and make the necessary changes, instead of conducting high level reviews and determining that existing policies and procedures are adequate to meet the new standards. Substantive requirements include the four outcome areas involving products and services, price and value, consumer understanding and consumer support.
  • Working with other firms: Firms will need to work and share information with other firms in the distribution chain. The findings suggest some may need to speed up their work in this area.

Key review findings

The FCA summarised the key review findings by listing examples of good practice, as well as areas for improvement. They provide useful guidance for firms on how they should develop their own implementation plans.

Governance and oversight

  • Implementation plans should be clear on who is responsible for them, and firms should be able to demonstrate that their boards and committees have properly scrutinised them.
  • The firm’s key governance bodies should be given progress updates on the implementation plans.
  • Firms should appoint an individual Consumer Duty board champion, who should be sufficiently senior to effectively challenge the firm’s approach to implementing the Duty.
  • Implementation plans should include a summary opinion from the risk and compliance or internal audit team.
  • Firms should consider how they will engage with the board and the executive post-implementation to provide ongoing assurance that they are complying with the Duty.

Culture and people

  • Implementation plans should provide for how the Consumer Duty will be embedded in firms’ culture and people approach.
  • Firms should consider the tangible actions they need to take to create a culture which focuses on delivering good customer outcomes.
  • Plans should set out a clear people and training approach to make sure all staff understand their responsibilities under the Duty.


  • Implementation should be specific in terms of timeframes and scope. Plans should give an indication of the number or proportion of products, services, communications and customer journeys covered by them.
  • Firms’ approach to prioritising implementation should be based on an assessment of the potential for poor consumer outcomes.
  • Firms should clearly set out risks and internal and external dependencies, and how they intend to mitigate them.

Third parties

Where firms work with third parties, and where the interdependency with the third party requires scrutiny in light of the Duty, for example where there is a relationship between the manufacturer and distributor of a product, firms should clearly identify the third parties they work with and the nature of the dependency. Plans should include details of how firms intend to engage with third parties in order to ensure compliance.

The four outcomes

Implementation plans should show how firms have engaged with the substantive requirements of the Consumer Duty. Firms should be wary of assuming their existing policies, procedures and frameworks are adequate to meet the requirements.

Data strategies

  • Implementation plans should clearly explain the data firms require to monitor compliance with the Duty, and they should be conscious not to purely repackage existing data.
  • Implementation plans should show consideration of how firms will monitor outcomes for different groups of customers, including those in vulnerable circumstances.

In terms of next steps, among other things firms can expect letters from the FCA, highlighting its key expectations on implementing the Consumer Duty and some of the key risks and consumer harms it’s concerned about in their sectors.

How we can help

Our consumer finance specialists have a great deal of experience advising firms on their regulatory obligations. They understand the practical challenges involved in creating implementation plans which effectively embed compliance with the Consumer Duty. If you need any advice or assistance in this area, please contact Jeanette, who will be very happy to help.