FCA highlights product and service improvements under Consumer Duty

The Financial Conduct Authority (FCA) has found improvements in how firms design, monitor, and distribute products under the Consumer Duty, although it highlighted further enhancements that could be made.

The regulator said that products designed with consumers’ needs in mind could better support good outcomes, helping people make informed decisions, get fair value, and receive the support needed.

However, when products are not designed to proper standards, they can confuse, mislead, increase complaints, and affect trust, while leaving people paying poor value if products fail to adapt to changing circumstances.

The Consumer Duty was found to reduce the risk that people got poor outcomes from purchasing unsuitable products, while many firms had also improved product governance, strengthened how they monitor consumer outcomes, and took more responsibility for how products and services were distributed.

Despite this, the FCA noted that some firms could still improve how they define their target markets, identify emerging risks from unsuitable products and services, and oversee third parties that deliver products and services to customers on their behalf.

“Consumers should be able to trust that the products and services they rely on to navigate their financial lives are designed for their needs, monitored properly, and deliver the outcomes they expect,” said FCA director of cross-cutting policy, Charlotte Clark.

“The good practice we’ve found really matters because where products are poorly targeted, or firms lose sight of what’s happening across their distribution chains, consumers can lose out - whether that’s poorly performing products, slow complaint resolution, or paying for services that don’t meet their needs.”

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