In this exclusive column for Financial Planning Today magazine, Dr Matthew Connell, director of policy and public affairs at the Personal Finance Society, unravels the FCA's new Consumer Duty.

'As we have all been made fully aware, the FCA’s Consumer Duty is set to come into force for new and existing products or services on 31 July 2023 and for closed products or services on 31 July 2024.

'At a recent event for Financial Planning professionals, it was fantastic to see so many recognising the importance of reviewing the way they work to ensure they meet the regulator’s new standard for client-centricity from next summer onwards.

'Many firms will find that what they are doing already goes a huge way to complying with the duty, and in some areas, the big risk may be over-compliance.

'The FCA’s rules require firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – at every stage.

'As well as acting to deliver good customer outcomes, firms need to understand and evidence whether those outcomes are being met. However, the questions that were asked during the event made it clear that some planners are thinking of the Consumer Duty at the level of individual clients, rather than as segments.

'The FCA’s requirements state the evidence has only got to be on the level of segments, with a policy put in place by planning firms to treat each segment differently. As a result, action and recording is needed at a management level, not an individual client level, when it comes to meeting the requirements of the FCA’s Consumer Duty.

'Ultimately, the Personal Finance Society views the Consumer Duty as an opportunity for the profession to prove how client-centric it is. We have welcomed the confirmation from the FCA that consumers having strong confidence and levels of participation in markets is one of the key outcomes that they are looking for from the Consumer Duty.

'No market can exist without the confidence of the public, and the Personal Finance Society believes it is important that we measure the key elements of confidence and trust.'

Matthew Connell is director of policy and public affairs for the Personal Finance Society.

• This column first appeared in Financial Planning Today magazine, Nov-Dec 2022 edition. Matthew's column appears in each issue of the magazine. You can subscribe to the magazine by registering for this website and then checking package options in 'My Account.'