Topic 17 FCA's Aims & Activities Part 2 Flashcards
Why was the Consumer Duty principal of business brought in?
To protect customers from bad conduct
When did consumer duty become effective for new & existing products?
31st July 2023
When did consumer duty become effective for closed products or services?
31st July 2024
Who does consumer duty apply to?
Product & services offered to retail customers
What principles no longer apply when principle 12 customer duty is in force?
Principle 6 (Customer’s Interest)
Principle 7 (Communications with clients)
What are the four outcomes has the FCA has identified for customer needs of firm-consumer relationship?
- Products & Services
- Price & Value
- Consumer Understanding
- Consumer Support
Which element for the key elements of the firm-consumer relationship is this?
Designed to meet customer needs & sold to customers who meet those needs
Products & Services
Which element for the key elements of the firm-consumer relationship is this?
Product & Services must represent fair value for customers
Price & Value
Which element for the key elements of the firm-consumer relationship is this?
Consumers must be given information they require to make effective, timely & proper informed decisions on products & services
Consumer Understanding
Which element for the key elements of the firm-consumer relationship is this?
Customers must be enabled to realise benefits of products & services without hinderence through support
Consumer Support
All the below are what?
- Act in good faith
- Avoid causing foreseeable harm
- Enable & support retail customers to pursue their financial objectives
Three cross-cutting rules
What does the Treating Customers Fairly (TCF) mean for a firm dealing with customers?
That a firm must pay due regard to the interest of it’s customers & treat them fairly
What are the below in relation to the types of behaviours it wishes to see in relation to customer fairness.
- Considering specific target markets when developing products
- Ensuing that communications are clear and do not mislead
- Honouring promises & commitments that have been made
- Identifying & eradicating root cause of complaints
Areas that a firm should consider when demonstrating fairness to customers
What is the purpose of clarity of sales?
- Ensure that advice given to customers is clear, fair and not misleading
- Advice to be given must high quality to avoid mis-selling
What are the below in regards to customers?
- Customers can be confident the firm they are dealing with is commited to fair treatment
- Products are designed to meet the needs of properly identified customers groups
- Customers are provided with clear instructions at all stages of a sale
- Any advice given is suitable for the customer
- Products perform as customers have been led to expect
- No unreasonable barriers to switching a product or making a complaint
6 outcomes to ensure fair treatment of customers
