Preparing the Consumer Duty Board Report 2025 – Tips to Consider
You might think that it has been only a few months since you were knee-deep in preparing your first Consumer Duty Board report and it is far too early to be thinking about the 2025 version. However, the deadline will come around very quickly so I thought I would share some tips for preparing your next report based on feedback the FCA has published and my own experience of helping clients prepare last year’s reports.
- Allocating enough time
- Support from colleagues and the Board
- Management Information(“MI”)
- Good customer outcomes
- Information sharing
- Culture
- Action plans
- Resources
1. Allocating enough time:
Give yourself enough time to produce the report as July will arrive and something else will take priority. Some firms left it very late to think about the report last year, which caused them a great deal of unnecessary stress. It will take time to gather and assess the information needed to prepare the report and document your findings, so plan ahead.
2. Support from colleagues and the Board:
Identify colleagues who should be involved in producing the report and let them know that you will need their support in the coming months.
Let your Board know that you will be circulating the report in June or July and they will be required to review it and sign it off. Book a slot at the June/July Board meeting and make sure you have enough time at that meeting so there can be a thorough discussion about the report.
3. Management Information (“MI”):
Management information continues to be a real challenge for firms. My experience is that many firms are using limited MI or, in some cases, no MI at all, to support the conclusions they have reached in the Board report. As a result, they are only able to make high level statements about delivering good customer outcomes without any evidence to back-up their claims. For example: statements such as “we believe our products and services are performing as intended”, or “we haven’t had any complaints about our fees so we assume customers think they are fair” are not sufficient.
The FCA has been scrutinising the information firms are using to evidence that they are meeting Consumer Duty requirements and their view is that firms need to do better. Think about the MI you have and whether it is giving you the information you need. Work out if there are any gaps and if there are, make plans to obtain the information you need.
4. Good customer outcomes:
When working out the MI you need, start with the outcomes you want your customers to receive. If you don’t know what good outcomes are, you won’t be able to measure whether you are delivering them, or know what MI you need to do this. And, if you don’t have appropriate management information, you won’t be able to reach informed and accurate conclusions about whether you are actually delivering good customer outcomes.
Outcomes should be specific. An example of an outcome which is too high level would be: “we will provide products which are designed to meet the needs of the target market” – this would be difficult to measure. On the other hand, an outcome that you can measure is “we will provide a response to all customer queries within 24 hours”.
5. Information sharing:
Those selling directly to customers will have lots of insights about whether products and services are performing as they should. They will know what customers are complaining about, or whether customers are finding it difficult to understand certain terms and conditions. They will also know whether there are customers with certain vulnerabilities who find it difficult to use your products and services.
It is vital that information is shared across the entire distribution chain, so ask all parties involved in the distribution chain for feedback, particularly if you are not dealing directly with customers. Unless you have these insights, or are dealing with customers directly, you won’t be able to provide your Board with the full picture, or know what issues need to be fixed.
6. Culture
Comment on how your firm’s culture is supporting good customer outcomes, for example through your strategy, remuneration arrangements, staff training and communications issued to staff.
7. Action plans
Last year, the FCA asked some firms for details of actions they identified as part of their Consumer Duty Board report assessments. Some months later, the FCA contacted those firms again to ask whether the actions had been closed out. A number of firms hadn’t thought about them until the FCA asked for an update.
Where you identify risks, issues or gaps, make sure that they are clearly highlighted and you have a documented action plan for each one with clear responsibilities and timelines, which should be tracked through to conclusion.
8. Resources:
Consumer Duty Board Report Template
Please do get in touch if you need any support with your Consumer Duty arrangements. We have a wide range of support tools available such as our Consumer Duty Assessment, Policies, Procedures and Templates, online and face-to-face training, management information and data guidance.
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