Consumer Duty podcasts
Some of our latest thoughts and insights on a range of Consumer Duty and customer vulnerability topics, ideal for listening on the go.
A Consumer Duty podcast (7:45)
Consumer Duty frequently mentions harms – but what are these? How do you go about assessing harms for your products and services? Some harmful outcomes are not trivial – and quite a lot of other circumstances can lead into those harms. Andrew Gething explains to Tony Crane how to look at harms in the context of a product and assess how large the harm is – or potentially could be. Andrew shares his firm’s experience of undertaking risk assessments to quantify risks – and how this can be applied to financial products and services.
A Consumer Duty podcast (5:19)
Tony Crane and Andrew Gething look at Consumer Duty’s ‘guidance’ and ‘rules’ to unpick whether – in real-world terms – there is a difference between these and the implications of deciding to ignore guidance even when following rules. Tony leads Andrew back to the principle that firms should be delivering good outcomes and that everything supports this – and in that sense there is little difference between the two. More importantly, deciding to comply with one and not the other misses the overarching principle of delivering good outcomes and avoiding harms.
A Consumer Duty podcast (13:22)
As firms gather vulnerability data on their clients, it’s clearly going to become the case that firms gather data in different forms and amounts – and can lead to consumers being asked again and again for very similar data, itself not a very good outcome. Even for a single product, a consumer could need to supply the same information for a manufacturer and adviser – or more. For example, for a mortgage, a consumer may need to do this with the mortgage provider, life insurance provider and general insurance provider – again, not a great customer journey. Andrew Gething and Tony Crane look at the options to share this data and how it may ultimately be the only way to provide the best customer experience.
A Consumer Duty podcast (07:41)
That vulnerability is not included within Consumer Duty as an explicit cross-cutting rule can create some debate as to its importance within the various rules. Andrew Gething and Tony Crane look at although this isn’t the case, vulnerability is included within each cross-cutting rule – so its importance within Consumer Duty shouldn’t be downplayed. They examine practical examples – such as the rule for acting in good faith and the rule for avoiding foreseeable harm, which include within them avoiding harm to vulnerable customers. In a sense, vulnerability cross-cuts all of the vulnerability rules – making it one of the most important aspects of Consumer Duty.
A Consumer Duty podcast (10:14)
Consumer Duty frequently makes reference to ‘advisers’ and ‘manufacturers’– implying for many that there is a difference in responsibility between these. After all – advisers advise, and manufacturers create products. However, in this episode of Duty Calls, Tony Crane and Andrew Gething explore how – under the Consumer Duty – advice firms are classified as manufacturers (because the FCA’s definition includes a firm’s advice service making it a manufacturer of the services the firm provides).
A Consumer Duty podcast (07:47)
Consumer Duty requires firms to not only understand the vulnerability characteristics of consumers, but also to tailor their communications, taking those characteristics into account. Tony Crane and Andrew Gething examine at what point it is best to ask consumers about potential vulnerabilities – and then what to do about it, how to tailor communications and the channels used to communicate with those consumers. They also look at topics such as how having a digital-first or digital-only communications strategy can be counter to the requirements of Consumer Duty.
A Consumer Duty podcast (07:57)
While some rules within Consumer Duty don’t explicitly state a specific need to accommodate or report on consumer vulnerability, the regulations do contain cross-cutting rules – each of which has a reference to vulnerable customers. What does this mean? Andrew Gething and Tony Crane look at a specific rule (in this case, rule 2A.9.10) to see how this is cross-referenced against the needs of those who are vulnerable. They also discuss how ‘measuring outcomes’ doesn’t mean waiting until an outcome occurs before you measure outcomes.
A Consumer Duty podcast (12:33)
Consumer Duty does require firms to pay regard to the nature, scale and characteristics of consumer vulnerabilities – but in practical terms what are the implications of this? Consumer Duty is a principle-based regulation – so there isn’t a definitive checklist of practical actions. It’s largely up to firms how they go about things – even if there is no doubt about what they need to do. So, within this framework, how do you assess vulnerability – and does this mean you need to assess everyone? Is there an easier way to deal with people en masse? Andrew Gething and Tony Crane discuss this in detail.