There must be procedures in place to identify if a customer is in a vulnerable situation and, similarly, procedures for dealing with such customers.
If your firm has not applied a fair value framework consistently to open and closed products and services, it must be able to justify any different approaches taken.
Firms need to demonstrate that they are meeting customer outcomes and if not, acting on these appropriately.
The first annual board report submission
The report should confirm that the firm has complied with its consumer duty obligations, how it has done so and how it will continue to do so, based on the relevant changes to be taken into consideration for the year ahead.
Having robust governance systems in place to monitor your firm’s progress is the best way to satisfy the board that the firm is complying with its ongoing consumer duty obligations.
Key elements to be included in the report include results of monitoring customer outcomes in relation to the products and services offered; evidence that remediation action generally has been taken where appropriate; and an opinion as to whether the firms existing business plan continues to align with the FCA consumer duty requirements.
We understand that firms do not have to send their board report to the FCA, however the FCA may request a copy of it and if your firm cannot provide this, then the firm will have failed to comply with its regulatory obligations and could face sanctions.
Alexandra Heron is a senior associate – financial regulation, and Eva Wichtowski is a trainee solicitor – corporate at Memery Crystal
