Boring Money respond to Hargreaves Lansdown’s comment on FCA Consumer Duty
27 July, 2022
Boring Money CEO Holly Mackay comments, “The 3rd Consumer Duty Outcome is Consumer Understanding. We know that the use of ‘simple English’ and no jargon is a key consideration for investors when choosing an investment product (51%), second only to a low annual cost (58%). The FCA say “we want consumers to be given the information they need, at the right time, and presented in a way they can understand.” (CP21/36, 9.1, pg. 48).”
Hargreaves Lansdown comment on FCA’s Consumer Duty noted below:
Chris Hill, CEO, Hargreaves Lansdown:
“We welcome the FCA’s intention to use the consumer duty to create more flexibility for firms to compete and innovate in the interests of consumers. This is exactly what our digital transformation at HL is all about. We are investing in more tools and nudges to drive better client outcomes.
With the consumer duty in place, we are keen to see the FCA revise its own rule book, to remove regulations which hinder innovation in the interests of consumers. There is scope for us to personalise guidance to clients to a greater extent, to drive engagement and better outcomes. We look forward to working with the FCA on this agenda as we embed the consumer duty at HL.”
FCA press release below:
The FCA’s Consumer Duty will lead to a major shift in financial services
The Financial Conduct Authority (FCA) has confirmed its plans to bring in a new Consumer Duty, which will fundamentally improve how firms serve consumers. It will set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.
The Duty is made up of an overarching principle and new rules firms will have to follow. It will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.
Clarity on the FCA's expectations and firms focusing on what their customers need should lead to more flexibility for firms to compete and innovate in the interests of consumers.
The Duty forms part of the FCA's transformation to becoming a more assertive and data-led regulator. With firms assessing how they’re meeting their customers’ needs, the FCA will be able to quickly identify practices that don’t deliver the right outcomes for consumers and take action before practices become entrenched as market norms.
Sheldon Mills, Executive Director of Consumers and Competition, said:
“The current economic climate means it’s more important than ever that consumers are able to make good financial decisions. The financial services industry needs to give people the support and information they need and put their customers first.
“The Consumer Duty will lead to a major shift in financial services and will promote competition and growth based on high standards. As the Duty raises the bar for the firms we regulate, it will prevent some harm from happening and will make it easier for us to act quickly and assertively when we spot new problems.”
The Duty will include requirements for firms to:
end rip-off charges and fees
make it as easy to switch or cancel products as it was to take them out in the first place
provide helpful and accessible customer support, not making people wait so long for an answer that they give up
provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than burying key information in lengthy terms and conditions that few have the time to read
provide products and services that are right for their customers
focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction
The FCA is giving firms 12 months to implement the new rules for all new and existing products and services that are currently on sale. The rules will be extended to closed book products 12 months later, to give firms more time to bring these older products, that are no longer on sale, up to the new standards.
Link to consultation announcement
Notes to editors:
Boring Money is an independent research and publishing house which provides information, tips and Best Buy tools to savers and investors. Currently, the website has over 200,000 monthly readers.
The business conducts regular research with industry providers and UK consumers to track the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 investment platform providers. It also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective.Data is sourced from Boring Money’s Online Investing Report 2022, drawing from a nationally representative survey base of 6,305 UK adults.
Founder Holly Mackay has worked in the investment industry for 20 years and is supported by a team of 28 researchers, analysts, technologists and marketing execs. Boring Money is not regulated to give personal financial advice nor is it regulated by the industry watchdog.
Please contact:
Holly Mackay, CEO & Founder
07984 609 827
holly@boringmoney.co.uk
Mikhail Ismail, Head of Marketing
mikhail@boringmoney.co.uk
