Implementing Consumer Duty for Asset Management Firms

This guide outlines the implementation of the Consumer Duty for asset management firms, as introduced by the Financial Conduct Authority (FCA) in July 2022. The Consumer Duty establishes a new standard of care that firms must provide to retail customers, encapsulated in the Consumer Principle, which mandates that firms act to deliver good outcomes for these customers. The document details how the Duty applies to regulated activities of asset management firms and emphasizes the obligations imposed on both distributors and manufacturers within the distribution chain. It explains the three main elements of the Consumer Duty: the Consumer Principle, three cross-cutting rules, and the four outcomes that define firm conduct. The guide also highlights the necessary compliance steps firms must take, such as conducting consumer outcomes tests, identifying potential harm, and ensuring fair treatment of customers. Additionally, it provides timelines for the Duty's implementation and outlines the FCA's review process to assess compliance and effectiveness in 2024.