Understanding the UK’s new consumer duty

The UK’s financial landscape is undergoing a significant transformation with the introduction of the Consumer Duty by the Financial Conduct Authority (FCA). Set to take effect from this month (officially from 31 July 2023 for new and existing products or services that are open to sale or renewal and will come into force on 31 July 2024 for closed products or services), this new regulation is a stride towards heightened consumer protection in the financial services sector. 

Many believe this development is not just a regulatory change; it’s a commitment to fostering a fairer, more transparent financial environment.

At the heart of it is the aim to ensure customers experience ‘good outcomes’. This goes beyond the traditional metrics of service quality; it’s about proving that these outcomes are indeed being achieved. It emphasises the importance of customer-centricity, urging firms to eliminate unfair charges and fees and focus on improving client experiences.

In striving for this, the new Consumer Duty is raising the bar for consumer protection across financial services. It requires firms to not only prioritise their customers’ interests but to ensure that their products and services are clear, supportive, and offer genuine value. For customers, this means more straightforward communication, better support, and products that truly meet their needs.

This new landscape will compel financial firms to enhance their service quality and customer focus. The FCA expects that the Consumer Duty will invigorate the market by promoting competition, nurturing customer loyalty, and rebuilding trust in the financial services sector. For financial firms, this presents an opportunity to realign their practices with a client-first philosophy.

The new rules apply to all existing offerings currently available for new or renewing customers. The FCA’s final guidance and policy statement provide a clearer roadmap for firms to align with these updated standards.

As financial planners, particularly attuned to the needs of expats and those navigating international financial complexities, we believe that it’s crucial to understand the impact of these changes. 

The Consumer Duty is about enhancing your financial journey, ensuring that your interactions with financial products and services are more transparent, fair, and focused on your well-being. At Northern Cross Wealth this has always been part of our culture.

Our commitment is to guide you through the implications of these new regulations. We’ll help you understand how your current or potential financial strategies align with the new Consumer Duty standards, and how to make the most of the opportunities this may present. From reevaluating financial plans to exploring new products tailored to meet these standards, we’re here to ensure your financial path is not only compliant but also tailored to your aspirations and goals.

The introduction of the Consumer Duty is a positive step toward a more transparent and customer-focused financial environment. As different providers and role players adapt to these changes, our goal is to ensure that your financial plans not only comply with the new regulations but also align seamlessly with your personal financial goals and aspirations.

Reach out to us today to start your journey to an aligned and purposeful financial future.

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