Hogan Lovells comments on new Consumer Duty rules and guidance

There is only a year to go before firms must comply and the first milestone is fast approaching. By 31 October 2022, firms' boards should have scrutinised and signed off on their implementation plans.

James Black, partner at Hogan Lovells, said: “While it’s good news that the implementation deadline has been extended slightly to 31 July 2023 (and 31 July 2024 for closed products which are no longer on sale), there is a huge amount to fit into that time. Implementation of the Consumer Duty is not just a question of making uplifts to existing arrangements: this is a cultural shift to the way firms operate, from the development of propositions through to servicing customers. 

“The clock is ticking and implementation projects should now be stepping up a gear. By the end of October 2022 firms’ boards should have agreed their plans and be able to show they have scrutinised and challenged them to ensure they are deliverable and robust enough to meet the new regulatory standards. The key focus should be on delivering tangible outcomes.”

Frank Brown, Senior Director at Hogan Lovells, added: “To make best use of the available time, we recommend firms set up projects with multiple workstreams covering a combination of top-down gap analysis and updating reporting requirements. In addition, firms should look at a more detailed bottom-up analysis of specific product expectations, support arrangements, appropriateness of communications and operational monitoring of good (and poor) outcomes. 

“Relevant stakeholders throughout the firm will need to be engaged from the outset to ensure all parts of the business understand the requirements and support the changes required to implement the Consumer Duty effectively. It is also important to identify potential blockers at an early stage to allow decisions to be taken by senior managers on how to move forward.”