Nearly half of firms are unsure on how long it will take to implement the most challenging consumer outcome of the Financial Conduct Authority’s (FCA’s) Consumer Duty, as the implementation deadline starts its 50-day countdown.

Consumer Duty applies to any firm that plays a role in determining outcomes for retail customers, including SME customers, and seeks to ensure good outcomes in four key areas, including price and value.

In a survey conducted by regulatory consultancy, Bovill, almost two-thirds (64%) of firms say that out of the four outcomes, ‘fair value’ is the most challenging. However, 44% say that they are still unsure about how long this will take to implement, and could not provide an estimate.

This is despite the fact that product manufacturers must have completed all reviews needed to meet the outcomes rules by 31 April, with the implementation deadline set for 31 July, with many firms committing a significant number of resources towards implementing the Duty, according to Bovill.

Following the deadline, firms must continue to invest in fair value and consider outcomes for a forward-looking basis, considering whether products will offer value in the future.

Partner at Bovill, Mark Spiers said: “The level of change needed to implement the Consumer Duty will vary from firm to firm, however it is a very wide-ranging piece of regulation and many still have a lot of work to do before the deadline. This is a large piece of work and the greatest challenge for many firms is the uplift required, and the substantial investments that they are having to make in their capabilities to ensure they are compliant.”

Bovill has provided a ‘fair value toolkit’ to help firms develop a robust approach to fair value.
The FCA’s recent review of 15 firms’ fair value assessment frameworks found that some are struggling to properly evidence how they are delivering fair value for customers, whilst also finding that some fair value assessments needed to take a more granular approach to products and services that span different market sectors.

Spiers added: “Firms will need to keep their fair value assessments under continual review. Fair value is a moving target, and firms must continue to deliver it when circumstances change. Distributors need to think carefully about what data and information they need from manufacturers, so that they can be sure of consistently good outcomes over the product, service and client lifecycle.

“Bovill’s toolkit can help firms put the correct measures and methodologies in place ahead of the deadline, which in turn will allow them to ensure their products and services continue delivering for consumers.”

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