Frequently Asked Questions

The FCA’s Consumer Duty applies to all regulated firms who transact with retail customers. Introducers should adopt proportionate measures when implementing the duty, considering the limited scope of the regulated activity.

The FCA Consumer Duty only applies to regulated firms who transact with retail customers. If a firm is not authorised and regulated, then the duty does not directly apply, although if you are part of a chain which is connected to the Duty, some parts may apply.

The Consumer Duty does not prescribe specific wording changes as this may vary depending on the size, scope, and complexity of your business. The NACFB has updated the template document repository to support firms within their policy and procedures.

Upon assessment, some lenders may deem themselves out of scope of the Duty. Where this is the case, it is recommended to speak with the lender and use best endeavours to gain as much information as possible.

Most firms will already be complying with the Consumer Duty, especially those NACFB Members who use NACFB templates and follow our general frameworks.

No. If you are not an authorised firm, the Consumer Duty does not apply to you.

Firms that act as Principal to Appointed Representatives must be able to demonstrate an appropriate degree of oversight for their products or services. Where those relationships inhibit good consumer outcomes, the FCA expect firms to act to correct this. If not, the FCA will consider whether there has been failure in the principal firm’s oversight and act where appropriate.

A distributor must ensure that product distribution arrangements contain effective measures and procedures to obtain sufficient, adequate, and reliable information from the manufacturer about the product to:

(1) Understand the characteristics of the product;
(2) Understand the identified target market;
(3) Consider the needs, characteristics, and objectives of any retail customers in the target market with characteristics of vulnerability;
(4) Identify the intended distribution strategy for the product; and
(5) Ensure the product will be distributed in accordance with the needs, characteristics, and objectives of the target market

The NACFB has created a template letter which Members can use to issue to lenders, encouraging them to share their distribution information.

All firms have the same responsibility to act to deliver good outcomes for retail customers, but there will clearly be differences in the capabilities of a firm depending on its size and activities.  Firms need to apply a proportionate approach to the Duty.

Distribution information received from a lender should be used to inform a broker’s distribution strategy. The information should ensure a lender’s products are distributed to the intended target market.

All templates have been reviewed and updated to include the Consumer Duty.