Financial services are an important part of everyday life for many people, from banking to insurance and mortgages. But when it comes to choosing the right product or service, it can be overwhelming to navigate the complex world of financial services. This is where the Consumer Duty comes in – a new regulatory initiative designed to help ensure that consumers are treated fairly and get the products and services that meet their needs.
We’ll take a closer look at the Consumer Duty and what it means for you as a consumer of financial services.
What is the Consumer Duty?
The Consumer Duty is a new regulatory initiative introduced by the Financial Conduct Authority (FCA) in the UK. It sets out a new framework for how financial services firms should treat their customers, with a particular focus on ensuring that customers get products and services that meet their needs, as well as providing clear and accessible information about those products and services.
The Consumer Duty has three key elements:
Acting in the customer’s best interest: Financial services firms should act in the best interests of their customers, taking into account their individual circumstances and needs.
Providing clear and accessible information: Financial services firms should provide clear and accessible information about their products and services, including fees, charges and risks.
Providing products and services that meet customer needs: Financial services firms should design and sell products and services that meet the needs of their customers, and take steps to ensure that those products and services remain appropriate throughout the customer’s relationship with the firm.
What Does the Consumer Duty Mean for Consumers?
As a consumer of financial services, the Consumer Duty should mean that you can expect a higher level of service from the firms that you deal with. Financial services firms should take a more customer-centric approach, putting your needs and interests at the heart of what they do. This should lead to more suitable products and services being offered to you, and a greater focus on transparency and clarity when it comes to information about those products and services.
Under the Consumer Duty, you should also be able to expect more proactive engagement from financial services firms, with a greater focus on ensuring that the products and services that you have are still suitable for your needs. This could mean that you receive more regular communications from your bank, insurer or mortgage provider, to check that you are still happy with your current product or service.
What Can You Do as a Consumer?
While the Consumer Duty puts more responsibility on financial services firms to act in your best interests, there are still things that you can do to ensure that you are getting the best possible service.
Shop around: Don’t be afraid to compare products and services from different financial services firms. This can help you to get a better deal, and ensure that the product or service that you choose is the most suitable for your needs.
Ask questions: If you are unsure about any aspect of a product or service, ask your financial services provider for more information. They should be able to provide clear and accessible information to help you make an informed decision.
Review your products and services regularly: Even if you are happy with your current product or service, it’s a good idea to review it regularly to ensure that it still meets your needs. If it doesn’t, consider switching to a different product or service that is more suitable.
The Consumer Duty is a new regulatory initiative that aims to ensure that financial services firms act in the best interests of their customers.
As a consumer of financial services, you can expect a higher level of service, with a greater focus on transparency and clarity when it comes to information about products and services. However, it’s still important to shop around, ask questions and review your products and services regularly to ensure that you are getting the best possible deal.
If you would like to ask any questions about Consumer Duty then please get in touch.