TECHNICAL TALK
THE CONSUMER DUTY : DO WE NEED A BIGGER BOAT ?
Karl Dines Head of Business Consultancy SimplyBiz
Ahoy there ! If there was ever a safe pair of hands to navigate the waves of the Consumer Duty , they belong to our very own Head of Business Consultancy , Captain Karl Dines ! In this article , you can find Karl taking a deep dive under the surface of the Consumer Duty to answer all your questions - What will the FCA require from firms ? Who will be affected ? And do we need a bigger boat ??
It was only after my third readthrough of The Consumer Duty that I understood exactly how big this thing is . It sets out a new Principle - Principle 12 . I mean , these Principles are the overarching guideline to our profession . If I were religious , it ’ s like Moses coming down from a big hill and saying , “ Hey , I ’ ve had a word with The Big Guy Upstairs , and we ’ ve got a new Commandment ”. It ’ s rather big , rather detailed , and far reaching . It ’ s not like we have a lot of time either , Consultation Paper CP21 / 36 is out now , it ’ s due to close 15 February 2022 , with the new rules applying from 31 July 2022 with an implementation period of nine months up to April 2023 . The regulator states that the Consumer Duty will apply to up to 51,000 firms , the costs they may incur to comply with the rules could be in the range of £ 688m to £ 2.4bn and the annual direct costs to be in the range of £ 74m to £ 176m . Of course , that ’ s proportional so smaller organisations will cost less , nevertheless we might need a bigger boat . And a quick one too ! So , what ’ s it all about ? The Consumer Duty will create a new Principle , which will provide an overarching standard of conduct for firms , this will be supported by cross-cutting rules which set out how firms should act and define standards of conduct . They require firms to :
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