There are two Consumer Duty deadlines on the horizon. Firms must take note and action as required.

30 April 2023

The first deadline is 30 April 2023. By this date, Manufacturers should have completed all the reviews necessary to meet the outcome rules for their existing open products and services so they can share with distributors to meet their obligations under the Duty and identify where changes need to be made. See below for further details.

31 July 2023

This is the implementation deadline for new and existing products or services that are open to sale or renewal. It is when all the rules for existing open products and services come into effect for both Manufacturers and Distributors.

Does that mean me?

At this point many readers will be thinking, “We are not a Manufacturer, so I don’t need to worry about the April deadline.” But, before you relax and give up on the rest of this article, beware – many Distributor firms will ALSO be Manufacturers. See below.

As indicated above, implementation of the rules takes effect from 31 July 2023, but the rules and guidance can already be accessed in the FCA Handbook under PRIN 2A. The policy statement can be seen here and the finalised guidance here.

Action required by 30 April 2023

The high-level requirements for the end of April are summarised below.

Manufacturers should aim to complete all the reviews necessary to meet the four outcome rules for their existing open products and services by the end of April 2023. The four outcomes are:

• Products and Services
  All products and services for consumers to be fit for purpose and be designed to meet the needs, characteristics and objectives of a target group of customers and distributed appropriately.
• Price and Value
  All consumers to receive fair value. Value is about more than just price, but firms should assess their products and services in the round to ensure there is a reasonable relationship between the price paid for a product or service and the overall benefit a consumer receives from it.
• Consumer understanding
  Firms’ communications to support and enable consumers to make informed decisions about financial products and services. Consumers to be given the information they need, at the right time, and presented in a way they can understand.
• Consumer support
  Firms to provide a level of support that meets consumers’ needs throughout their relationship with the firm.

The purpose of the review is so that firms can:

• share with distributors by the end of April 2023 the information necessary for them to meet their obligations under the Duty (e.g., in relation to the price and value, and products and service outcomes)
• identify where changes need to be made to their existing open products and services to meet the Duty and implement these remedies by the end of July 2023.

Where firms identify serious issues causing immediate consumer harm, they should prioritise action to remedy this.

Where actions to bring products and services up to Consumer Duty standards can be completed more quickly than the implementation deadlines, firms should consider doing so, to improve outcomes for consumers more quickly.

Definition of ‘Manufacturer’

We hinted above that Distributor firms may also be Manufacturers. We intend to expand on this in another article in the near future but there are some situations where Manufacturer status might apply, for example, firms that operate in-house model portfolios. But that is far from the only scenario. Watch this space for further guidance.