The Financial Conduct Authority’s Consumer Duty: 


FCA’s new rules have set a higher standard for consumer protection in financial services:

Since 31st July new expectations have been established outlining the level of care firms should provide to customers, known as Consumer Duty.

The new Consumer Duty entails providing accessible and helpful customer support; transparent communication and information; and fair value for the clients to meet their financial goals. Fair price and value must be achieved, ensuring that the price of the product remains proportional to the overall benefits. Also, for products to not exploit behavioural biases to charge unfair prices. 

This underscores the prioritisation of consumers within the new regulatory framework, emphasising that firms should act in the client’s best interest. This allows for consumers to easily cancel and change products; receive properly informed decisions about services and products; and reach their financial goals without unreasonable barriers.

The Duty further encompasses the need for firms to assess, test, and understand the outcomes their customers are receiving. Thus monitoring and understanding the outcomes consumers are experiencing in order to address any risks is beneficial. 

These rules have taken effect for new and existing products. However, the timeline extends until July 31st, 2024 for closed products or services. This provides firms with the necessary time to update older products in accordance with the new FCA standards.

The FUNDSaiQ platform facilitates adherence to the higher standards of the Consumer Duty and assists in achieving fair value and price for clients. This is exemplified by our commitment to complete transparency and the ability to pinpoint the 2-3% best active funds that consistently beat passives in each market universe. The platform provides the weighted 5-year excess return over the best passives and its 5-year absolute returns. In addition, the platform can identify the best lower-cost passive funds and its corresponding weighted five-year return that perform equally as well as the active options. Both these features illustrate how FUNDSaiQ can provide fair price and value. 

The platform has streamlined operations by automating the major parts of the fund selection. It also monitors the consistently best fund managers in each investment strategy globally and possesses the ability to assess the risk-reward. This allows firms to regularly track risk to communicate with clients in order to make effective and timely decisions and take responsibility for their actions. 

In addition, FUNDSaiQ’s platform provides an ESG filter to select funds that are aligned with the client’s environmental, social, and governmental values. As a result, demonstrates how our platform acts in accordance with the Consumer Duty by providing options for products that are right for the client and match their principles.

The FCA expects that a firm’s board will take full responsibility for integrating the Consumer Duty and senior managers to be accountable for all outcomes experienced by consumers. Hence, utilising the FUNDSaiQ platform will assist firms in meeting the new higher standards of the Consumer Duty. 

Read more about the Consumer Duty by the FCA here