This guide examines Consumer Duty and how ITC Appointed Representative (AR) Network Members can continue to provide a level of service that meets their customers’ expectations.
What is Consumer Duty?
In a nutshell, The Duty is made up of an overarching principle and new rules that firms must follow. It means that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and the customer support they need, when they need it.
What is a Network Member's Responsibility?
The Duty supports each of these four outcomes:
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Fair value: Consumers will pay a price for products and services that represent fair value, whilst poor value products and services are removed from the market. This will lead to fewer upheld complaints about poor value and unexpected fees or charges.
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Suitable products and services: Consumers are sold and receive products and services that have been designed to meet their needs, characteristics, and objectives. This will lead to a reduction in the number of upheld complaints about products and services not working as expected.
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Suitable treatment: Consumers receive good customer service leading to a reduction in upheld complaints about switching, cancellation and service levels. This will lead to customers having higher levels of satisfaction with the service they receive.
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Confidence: Consumers increase their confidence in financial services markets and are equipped with the right information to make effective, timely and properly informed decisions about their products and services.
How do we ensure these outcomes?
The following are examples of Consumer Duty requirements:
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The products or service propositions are suitable for the customers at which they are aimed i.e. suitable advice and target market.
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Marketing (including sales paths and documentation) must be clear, fair and not misleading, and must be approved by ITC Compliance prior to use.
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Product and service propositions must be clear in their pricing and charging structures so that customers can make clearly informed decisions.
What should I do to meet this requirement?
To ensure Network Members meet the requirements of Consumer Duty, you need to ensure that your staff are appropriately trained with the necessary skills to deal with sales, claims (if applicable), vulnerable customers and complaints efficiently and effectively. The procedures we have put in place regarding the monitoring of Network Member’s websites and sales practises also need to be reviewed regularly.
You must ensure all communications are appropriately targeted and information must be clear, fair and not misleading. You must deliver standards of service consistent with the importance of products to customers and evidence of delivery of the four Consumer Duty Outcomes.
Relationships with your customers should be underpinned with appropriate communications and should ensure that the customer is provided with access to relevant products, services or information. Customers should be provided with the levels of service both promised and required by them.
How does ITC Compliance assist Network Members to demonstrate Consumer Duty?
There are many ways in which ITC assists in the demonstration of Consumer Duty Outcomes. This includes:
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The provision of compliant sales systems (e.g. APEX)
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Financial Promotion approval and guidance
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Website approval and guidance
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Regulatory Complaint handling and guidance
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Regulatory Audits and file reviews
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The provision of suitable training for all staff involved in regulated activity
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Due diligence around products and providers for Network Members
