'A firm must act to deliver good outcomes for retail customers' - is the overreaching consumer principle.  The Consumer Duty is a step up from exisitng TCF principles.  Is it new?  Not entirely, some of requirements of the consumer duty have been in the handbook for some time in some form or another. It will mean taking a more in-depth look at your business to ensure you always deliver on ‘good consumer outcomes’.  See below for a condensed version of the Consumer Duty for mortgage brokers:

Firms will need to take an in-depth review of every aspect of the business from start to finish and beyond.  This means looking at advertising, documentation, service during and after, adviser understanding and the firms systems and controls especially in connection with SM&CR and vulnerability. 

The outcome of the review is to check the following; that the products and service you provide are good value, fair on fees and fit for purpose, that they are suitable and meet the customer’s objectives. Those customers are not misled at any stage from initial advertising, during the application process and after.  That the advisers are correctly vetted, competent, have a good understanding on the products they provide and deliver a high level support service for all products offered.  The documentation provided to customers is clear and informative with key risks highlighted and information is provided in good time for them to make effective and informed decisions. And the firm has correct procedures to deal with vulnerable customers from recognising, understanding and additional action taken.  Finally this all needs to be evidenced, and you need to monitor your business for communications, customer understanding, and outcomes.

What to do next? 

A more in-depth summary of the Consumer duty is available, please enquire.  We recommend you carry out a gap analysis audit on your business to highlight any shortfalls and then take the appropriate action to correct these and install any processes that are needed. Firms have until the 31st July 2023 to get everything in place before the Consumer duty deadline. 

Please keep checking the H3 site or twitter feed for updated information, new templates and when a gap analysis document to carry out the audit for the Consumer Duty is available – this will allow firms to quickly and simply establish if they are compliant with the new rules and explain any remedial action required.