Consumer Duty - Board Reports
23 January 2024
One of the cornerstones of the Consumer Duty is the annual requirement for the Board or equivalent body to review and approve the firm’s report on retail customer outcomes, confirm the firm is complying with its Duty obligations, and that its business strategy is consistent with Duty principles. Whilst I appreciate many recipients on this email do not operate with a formal ‘board’; you are encouraged to document the firm’s outcomes regardless.
Under the Duty, firms need to prepare a report for their Board setting out the results and actions of monitoring retail customer outcomes. The Board is then required to:
review and approve the firm’s report on customer outcomes;
confirm it is satisfied that the firm is complying with the Duty; and
assess whether the firm’s future business strategy complies with the Duty obligations.
A sufficiently detailed and well evidenced report should allow the Board to confirm it is satisfied that the firm is in compliance with the Duty.
The above can be reflected in three core pillars of the report:
A. Monitoring results: the report should include overall monitoring results, including those that indicate poor outcomes and/or any groups of customers that are receiving worse outcomes compared to other groups, together with an evaluation of the impact and root cause of those findings.
B. Actions taken to address risks or breaches or improve outcomes: firms need to act where they identify poor outcomes or where better outcomes could be achieved by specific customer groups. Examples include:, changes to service features, pricing structures or fees, changes to distribution arrangements and distributor on-boarding controls and practices, changes to customer journeys and support provision or communications.
C. Business strategy impact: firms need to assess whether their current and future business strategy align with the Duty and, if they do not, make the necessary changes. Examples of business strategy impact include: changes to sales strategies such as a reduction in reliance on low/poor value products in future, embedding Duty compliance in the process.
The deadline for the completion of Board reports is the 31 July 2024, so you have plenty of time to start thinking about what you’d like or need to include. I’m on hand to advise / look over any drafts / completed versions nearer the time.
If you have any questions, please do not hesitate to get in touch.