FCA PROPOSES ‘FIT FOR PURPOSE’ RETAIL RULES

The Financial Conduct Authority (FCA) has proposed Consumer Duty regulations that will require regulated firms to sell retail products that are “fit for purpose”. The duty will set “higher expectations” for the standard of care that insurers and brokers provide consumers and small to medium sized enterprises and would require a “significant shift in culture and behaviour” for most firms. According to the FCA, the new duty will require firms to “put themselves in their customers’ shoes” and sell products and services that are “fit for purpose, that represent fair value and are clearly communicated and understandable”. Failure to comply with the Consumer Duty will result in regulatory action, including enforcement investigations, the FCA warned. The new rules are expected to be finalised by the end of July 2022.