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Consumer Duty firm survey – Autumn 2023

Apr 2, 2024 11:00:00 AM

Summary 

In Spring 2023, we commissioned Ipsos UK to survey 1,230 firms in scope of the Consumer Duty (the Duty). This helped us understand how prepared firms were for the implementation deadline for open products and services of 31 July 2023. In Autumn 2023, Ipsos UK conducted a second survey with 634 firms not surveyed previously. We wanted to examine how our additional engagement had helped firms prepare. The smaller firm sample means we are only drawing conclusions about firms surveyed, not all firms in scope of the Duty. We are publishing headline conclusions now to provide a snapshot of where surveyed firms are with their implementation and provide context for our future work. The full survey results contain more information about the methodology and approach to sampling.

We were particularly interested in how smaller firms (1-49 employees) had implemented the Duty and whether firms had made changes to their consumer contracts and financial promotions. The fieldwork ran from September to October. The results of firms surveyed indicate improvements since Spring 2023. In particular:

  • The proportion of firms surveyed reporting that they have completed the required steps has significantly increased for some portfolios, and 43% of firms surveyed reported that they are not having difficulty with implementing any aspects of the Duty.
  • Retail Finance Providers and Debt Advice Firms, sectors which lagged behind others in preparedness in Spring, report improvement bringing them closer to other sectors. This showed the benefits of our targeted engagement.
  • The percentage of firms surveyed that conducting relevant activities have increased for several key elements of the Duty. Firms are most likely to report that they have identified the target market for their products and services (74%), and nominated a member of staff, team, or committee to oversee implementation (73%).
  • At wave 2, 74% of firms surveyed also report that they have conducted a fair value assessment (note, this measure was not included at wave 1 of the research). 
  • Outcomes monitoring is reported as most difficult to implement, with Payment Services Firms (41%) and Wealth Management firms (36%) most likely to report this.
  • 38% of firms surveyed have improved significant consumer contracts and 30% of firms have identified or made significant improvements to their marketing strategies.
Reported improvements in complying with the Duty are a positive trend that must continue towards and beyond the upcoming full implementation deadline on 31 July 2024. Firms need to be sure they are not only undertaking the necessary activities to embed the Duty, but also that they can evidence this activity, delivering good consumer outcomes. This will be mirrored in the FCA approach. We are working to check that firms are fully embedding the Duty and delivering good outcomes.

Links: https://www.fca.org.uk/data/consumer-duty-firm-survey-autumn-2023