The Financial Conduct Authority (FCA) has issued a fresh warning on the need for adviser firms to meet a Consumer Duty deadline for closed products.
In a speech given at a recent event hosted by KPMG, FCA executive director of consumers and competition, Sheldon Mills (pictured), set out the regulator’s latest stance.
“Firms have made solid progress in many areas of the Consumer Duty and the clock is now ticking for closed products and services to comply,” he said.
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“We are ready to work with industry on meeting the closed product deadline and urge firms to prioritise areas where there is the greatest risk of consumer harm.”
The deadline for closed products to come into line is July 31 this year. He urged firms not to “panic” and noted a lot can be achieved in six months to a year.
“We know some closed products may offer poor value,” Mills said. “In some cases, customers in legacy products might pay higher charges than they would for open products, where firms are competing for new business.
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“In all situations, firms must assess and be able to demonstrate, that their closed products provide fair value to customers.”
Mills concluded his speech on an optimistic note.
“Getting it right for consumers means higher standards and healthier competition,” he said. “It means improving trust in our sector, it means supporting growth and innovation, and it means boosting the UK’s competitiveness on a global stage.
“Competitiveness comes from being a beacon of high standards and fair value – and from entrenching consumer trust. This in turns attracts investment. The prize is huge if we can get this right.”
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