Almost half of firms are unsure of how long it will take to implement the Financial Conduct Authority’s Consumer Duty as the deadline approaches, a new survey has found.
Consultancy Bovill found that 44% of firms are still unsure how long it will take to implement the new consumer regulation and were unable to give an estimate.
This is even though product manufacturers must have completed all reviews needed to meet the outcomes rules by the end of the April.
And also the deadline for implementation is at the end of July.
Nearly two-thirds of firms (64%) said of the four outcomes, ‘fair value’ is the most challenging.
The FCA recently published its review of 15 firms’ fair value assessment frameworks, finding that some firms are struggling to properly evidence how they are delivering fair value for customers.
It also found that some fair value assessments needed to take a more granular approach to products and services that span different market sectors.
The Consumer Duty applies to any firm that plays a role in determining outcomes for retail customers including SME customers.
It seeks to ensure good outcomes in four key areas, including price and value.
Bovill has found that many firms are having to commit significant resources towards implementing the Consumer Duty before the 31 July deadline.
Product manufacturers should have completed all necessary reviews by 31 April, to give distributors sufficient time to meet their obligations ahead of the implementation deadline in July.
After the deadline, firms will need to continue to invest in assessing fair value. Under the Duty they will need to consider outcomes on a forward-looking basis, considering whether products will offer value in the future.
Mark Spiers, partner at Bovill, said: “The level of change needed to implement the Consumer Duty will vary from firm to firm, however it is a very wide-ranging piece of regulation and many still have a lot of work to do before the deadline.
“This is a large piece of work and the greatest challenge for many firms is the uplift required, and the substantial investments that they are having to make in their capabilities to ensure they are compliant.”
Spiers added: “Firms will need to keep their fair value assessments under continual review. Fair value is a moving target, and firms must continue to deliver it when circumstances change.
“Distributors need to think carefully about what data and information they need from manufacturers, so that they can be sure of consistently good outcomes over the product, service, and client lifecycle.”
By contrast Timeline chief commercial officer Ed Carey told Money Marketing advisers are “very well prepared” for the roll-out of the Consumer Duty.
Last week he said increasing numbers of advice firms use Timeline “due to Consumer Duty issues”.