As you may know, the FCA has published Consultation Paper 21/13:’ A new Consumer Duty’. Each month we will be breaking this down into what it actually means. One of the proposals is the Cross-cutting rules requiring three behaviours from firms as follows:
- Take all reasonable steps to avoid causing foreseeable harm to customers.
- Take all reasonable steps to enable customers to pursue their financial objectives.
- Act in good faith.
You will be expected to comply with these cross-cutting rules and behaviours across all of your activities, from high-level strategic planning to individual customer interactions.
The FCA proposal expects that these behaviours will be interpreted by firms in the context of:
- The nature of the product/service offered (i.e., high levels of complexity will require further information/assistance for customers).
- The relevant distribution chain.
- The reasonable expectations of consumers for that
particular service/product (i.e., where the added value marketed by the firm is to be delivered via customer service).
- The specific characteristics of the customers (i.e.,