This article was first published in Investment Week on 29 September 2021
The door has recently closed on the first stage of the FCA Consumer Duty consultation and work is going on to formulate a regulation that will come into force in 2022. I wonder how many CEOs within asset and fund management firms earmarked this new regulation as a priority for them personally?
There a number of reasons why it may not have been prioritised:
- It’s a period of consultation so no hard and fast rules have yet been agreed.
- New rules are not due to be in force for at least another year.
- It sounds very like a refresh of the Treating Customers Fairly rules that are already in place.
If you are a CEO that has this proposed new regulation in sight, there’s a strong likelihood the task of considering/responding to it has landed with senior managers elsewhere within the firm.
Why might that be an issue?
The FCA is determined to improve financial services for end consumers and what they are proposing will go much further than the Treating Customers Fairly regulation.
They are looking across the entire value chain to minimise buck-passing and they are keen to get this moving quickly. They want to see heads of firms actively engaged in making change happen.
While many may regard additional regulation as unwelcome, Consumer Duty offers CEOs a major opportunity to transform their businesses. Rather than focusing on ticking off rules, if done thoroughly, embedding a customer experience framework can boost productivity, reduce costs and differentiate your offering from the competition.