As the dust settles on the Consumer Duty landscape one year after it was first introduced, TCC has been keen to gauge industry feedback on how the Duty has been embedded thus far. With this in mind, we’ve hosted two Consumer Duty forums over the past six months – totalling attendance from approximately 40 firms across various financial service sectors.

The forums facilitated firms in offering their thoughts on their approach to Consumer Duty risk analysis regarding the core outcome requirements including price, value and performance.

The risks of comparison

An interesting (and somewhat concerning) aspect of this commentary was a desire to be comparable to their peers for example, “no worse”. Not wanting to be an outlier when it came to price and product design, which the forum conceded had connotations of “if it goes wrong at least we are not the worst”.

This mindset, which is often called a ‘safe harbour’ approach – may appear to offer some immediate benchmarking – but can create more risk than it solves.

Forum discussions also covered some core risks to address before this approach could be used with any degree of comfort:

• Small does not automatically equal less
• Cheap does not automatically equal good
• Similar after-sales key risk indicators do not automatically mean you are the same

In conclusion, firms agreed that peer group comparisons have some merit but could mislead firms into thinking similarities reduce their own risks.

Ensuring good outcomes

Every firm possesses its distinct characteristics and risks that must be dealt with. Ultimately, it falls upon the board to guarantee that their systems and controls are tailored to ensure the presence of suitable products and positive outcomes, with any risks being promptly and appropriately addressed.

In the meantime, TCC continues its work on forthcoming Consumer Duty forums. Firms are invited to attend and can request the outputs of the forums to date.

Given the multitude of essential criteria to meet and the high stakes involved, upholding Consumer Duty compliance is undeniably a substantial undertaking for regulated firms. It demands a significant investment of time, resources, and budget to consistently achieve success.

Get in touch today for a confidential discussion about how we can help your firm.