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FCA Consumer Duty Update: Key Messages for Mortgage and Protection Firms

Regulatory Update | July 2026

Consumer Duty has now moved beyond implementation.

For FCA-regulated mortgage and non-investment insurance firms, the focus is no longer simply on whether Consumer Duty frameworks, policies and processes are in place. The FCA expects firms to be able to demonstrate that they are delivering good outcomes for customers — and that they understand where potential risks may exist.

The introduction of Consumer Duty represented a significant shift in regulatory expectations. Firms are now expected to look beyond whether they have followed a process and consider whether that process is actually achieving the right result for customers.

For mortgage and protection firms, this means being able to evidence that customers are receiving suitable advice, appropriate support and clear information throughout their journey.

As the FCA continues its supervisory work, firms should be reviewing their Consumer Duty approach and considering whether their Management Information (MI), monitoring and governance arrangements provide sufficient evidence of good customer outcomes.

What This Article Covers

In this update, we look at:

  • The FCA’s continued focus on Consumer Duty outcomes.
  • What this means for mortgage and non-investment insurance brokers.
  • Key areas firms should review.
  • Common areas where firms may need to strengthen their approach.
  • How effective MI and monitoring can help demonstrate good outcomes.

Consumer Duty: The Focus Has Shifted to Evidence

When Consumer Duty was introduced, many firms focused on reviewing policies, updating procedures and ensuring their teams understood the new requirements.

Those steps were important, but the FCA’s expectations go further.

The key question for firms is now:

How do we know our customers are receiving good outcomes?

This requires firms to have evidence that supports their conclusions.

For mortgage and protection firms, this evidence may come from a range of sources, including:

  • File reviews.
  • Customer feedback.
  • Complaints analysis.
  • Vulnerability monitoring.
  • Adviser competence assessments.
  • Management Information.
  • Quality assurance reviews.

Having processes in place is only part of the requirement. Firms need to understand whether those processes are working effectively.

Management Information Remains a Key Area of Focus

One of the biggest challenges for firms is ensuring that their MI provides meaningful insight.

The FCA does not expect firms to measure everything. However, it does expect firms to understand the information they collect and use it to identify risks and improve outcomes.

For mortgage and non-investment insurance brokers, useful MI may include:

  • File review outcomes and trends.
  • Suitability issues identified.
  • Repeat adviser findings.
  • Complaint themes.
  • Cancellation or lapse trends.
  • Customer feedback.
  • Vulnerable customer outcomes.
  • Training and competence results.

The important question is not:

“What data do we have?” The important question is: “What does this data tell us about customer outcomes?”

Find out what MI you should be measuring on our Compliance Academy Page here

Mortgage Advice Firms Should Review Customer Journeys

Consumer Duty applies across the entire customer journey, not just the point of advice.

Mortgage firms should consider whether they understand the customer’s experience from initial contact through to completion and beyond.

Areas to review may include:

Initial Engagement

Consider whether customers understand:

  • The services offered.
  • Fees and charges.
  • The advice process.
  • What support is available.

Advice Process

Firms should consider whether:

  • Recommendations are suitable.
  • Customer circumstances are properly understood.
  • The reasons for recommendations are clearly documented.

Post-Sale Support

Consumer Duty does not end when a mortgage completes.

Firms should consider:

  • Whether customers know where to go for support.
  • How ongoing communications are managed.
  • Whether customers experiencing difficulties are identified and supported.

Protection Firms Should Consider Customer Understanding

For non-investment insurance firms, Consumer Duty also places emphasis on whether customers understand the products they purchase.

Protection products can provide significant value, but only where customers understand:

  • What is covered.
  • What is not covered.
  • Key exclusions and limitations.
  • The importance of maintaining cover.

Firms should consider whether their processes demonstrate that customers are receiving information in a way they can understand.

This is particularly important where products involve complex terms, multiple options or decisions that customers may find difficult to assess.

Vulnerable Customers Continue to Be an Important Consideration

The FCA continues to place significant importance on firms identifying and supporting vulnerable customers.

Mortgage and protection firms should ensure they understand:

  • How vulnerabilities are identified.
  • How information is recorded.
  • What additional support is provided.
  • Whether vulnerable customers achieve comparable outcomes.

Simply recording that a customer is vulnerable is not enough. Firms should be able to demonstrate that they have considered whether additional support is required.

Common Areas Firms Should Review

As Consumer Duty continues to develop, firms should consider whether they are able to evidence the following:

Clear Governance

Do senior managers understand Consumer Duty risks and receive appropriate MI?

Effective Monitoring

Are file reviews and compliance checks identifying meaningful trends?

Customer Understanding

Do customers understand the products, services and recommendations provided?

Evidence of Action

Where issues are identified, are actions recorded and followed through?

Continuous Improvement

Can the firm demonstrate that it learns from complaints, reviews and customer feedback?

What Should Firms Do Now?

Consumer Duty should now be embedded into normal business activity rather than treated as a separate compliance project.

Mortgage and protection firms should regularly review:

  • Whether their MI remains relevant.
  • Whether monitoring identifies emerging risks.
  • Whether training reflects current issues.
  • Whether actions from previous reviews have improved outcomes.

The firms that are best prepared will be those that can clearly demonstrate not only what they do, but why they believe it leads to good customer outcomes.

Final Thoughts

Consumer Duty has changed the FCA’s expectations of regulated firms.

For mortgage and non-investment insurance brokers, the challenge is no longer simply demonstrating that processes exist. Firms need to understand whether those processes are delivering the right outcomes for customers.

Effective monitoring, meaningful MI and strong governance will remain central to demonstrating compliance.

The question every firm should continue to ask is:

“How do we know our customers are receiving good outcomes?”

If the answer is supported by clear evidence, firms will be in a much stronger position to demonstrate that Consumer Duty is genuinely embedded within their business.

How H3 Consultancy Can Help

H3 Consultancy supports FCA-regulated mortgage and non-investment insurance firms with practical compliance solutions designed around the realities of running a regulated business.

From Consumer Duty reviews and compliance monitoring to file reviews and Management Information frameworks, we help firms understand their regulatory obligations and demonstrate good customer outcomes.

If you would like to review your Consumer Duty approach, contact H3 Consultancy to discuss how we can support your business.

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