It is a Financial Conduct Authority (FCA) requirement that firms carry out a review, at least annually, to assess whether they are meeting the Consumer Duty requirements and delivering good outcomes for their customers. This is not just a procedural exercise, but an opportunity for firms to step back and critically evaluate how their products, services and processes are performing in practice.
A key part of this review is the ability to assess, test and evidence the outcomes customers are receiving. Firms should consider a range of management information (MI), such as complaints data, file reviews, customer feedback and product performance, to identify whether any groups of customers may be experiencing poor outcomes or foreseeable harm. Where gaps or risks are identified, firms should take appropriate action and document the steps taken to address them.
The FCA expects firms to be able to clearly demonstrate how they have reached their conclusions. This means maintaining a clear audit trail of the review, including the data considered, the rationale for decisions made, and any actions implemented as a result. This will be particularly important where firms conclude that outcomes are good, as they must be able to evidence how this has been assessed.
Ultimately, the annual review should be seen as part of an ongoing process, rather than a one-off task. By regularly monitoring outcomes and taking a proactive approach, firms can ensure they continue to meet their obligations under the Consumer Duty and deliver fair value and positive experiences for their customers.
