I think we’re all now aware of the revised timeline for the implementation of the Consumer Duty.
The publication of the final rules in respect of the Consumer Duty, Policy Statement PS 22/9 and Finalised Guidance FG 22/5 highlighted that all firms need to have in place their implementation plan. The FCA comments:
“A firms’ board (or equivalent management body) should agree implementation plans and maintain oversight of their delivery, to ensure the implementation work is sufficient to meet the Duty standards.”
“Firms should expect to be asked to share implementation plans, board papers and minutes with supervisors and be challenged on their comments.”
So, in this article we want to comment on:
- Who needs to be involved in the implementation plan process?
- What resources will be needed to construct the implementation plan?
- How am I going to write the plan?
Who needs to be involved in the implementation plan process?
- Naturally, all the SMFs in the business will need to be fully engaged and involved in the construction of the plan
- Your Consumer Duty Champion (if appropriate, and not an SMF already present) would also be a key attendee
- Advisers in each advice area of advice the firm provides would ensure representation of all aspect of the advisory business (particularly in any specialist areas, such as long-term care or Defined Pension Benefit advice)
- Admin/ paraplanner staff will also bring their own expertise and knowledge to the party
- Other key staff. This could include specialist staff who are perhaps involved in the firm’s marketing arrangements
- The staff listed above may not all need to be present at all the planning meetings; you may want to start planning with a small cohort and bring in specialist staff for certain key tasks as required. Remember to minute these meetings as the FCA has stated it’s not just the plan itself they may want to challenge.
What resources will be needed to construct the implementation plan?
We’d suggest that you plan carefully to have to hand the reference you are going to need to construct your plan. Here are some pointers:
- Time. How long you want to spend in these planning meetings will largely determine how many meetings you’ll need
- Governance plans. For example: staff incentive plans, vulnerable client/complaint/financial promotions/continuity/breach/staff incentives/T&C policies, registers and records
- Last three years’ regdata submissions, compliance plans and Training & Competence records, so you may see any trend(s) and training requirements ‘at a glance’
- Due diligence held on any Centralised Investment Proposition component parts that may be in place. These may not have been reviewed for some time, so start by redefining your target market is and what client needs are. Your due diligence and research material will then be centered around this
- Your business strategy/ plans. If you have any plans to buy/sell/merge or expand/contract the business add or remove FCA permissions, or any other plans of control or ownership, you will need to have these in mind to ensure that they do not upset or derail any plans to deliver the Duty outcomes
You’ll know your own business better than anyone else, so consider what other reference material you may have. Again remember, the FCA has stated it’s not just the plan itself they may want to challenge.
How am I going to write the plan?
Whatever you are planning to deliver the Duty outcomes, you’ll want to assure the FCA and provide evidence of:
- Your firm’s governance arrangements are aligned to meet the Duty outcomes
- All staff are fully trained on what is expected
- Future business plans do not hinder meeting the Duty requirements
- You will be able to generate MI to evidence Consumer Duty outcomes
- SMF’s have full oversight and control
Paradigm has made available a Consumer Duty implementation plan, with an accompanying aide memoire to provide further support and guidance, to firms that subscribe to our compliance support services.
For other firms we have a raft of further support in our public pages: Consumer Duty support hub.
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