FCA axes Consumer Duty Champions rule

The FCA confirmed this week that its requirement for regulated firms to have ‘Consumer Duty Champions’ has been axed. As part of its efforts to scale back over-burdensome regulation, the FCA has removed the requirement for firms to have a board member responsible for Consumer Duty oversight. In an update to its Consumer Duty requirements, the watchdog said the need for firms to have Consumer Duty Champion ended yesterday (27 February). Firms still have the option to retain the Champion role but it is no longer mandatory. The FCA’s Consumer Duty requirements still apply with firms required to ensure that they act in the best interests of customers, new and old, at all stages of the customer journey. The Consumer Duty requirements came into force for open products and services on 31 July 2023, and for closed products and services on 31 July 2024. The FCA said the requirements should now be “well-embedded” in firms’ management discussions, processes and policies. The requirement for a Consumer Duty Champion (at board or equivalent level) was announced in FG22/5 Finalised Guidance - Non-Handbook Guidance for firms on the Consumer Duty in July 2022. At the time the FCA said: “We want firms’ boards and senior management to make good outcomes for consumers central to their firm’s culture, strategy and business objectives." In an update this week, the FCA said: “In FG22/5, we said that we expect firms to have a champion at board (or equivalent governing body) level to support the Chair and CEO in raising the Duty regularly in all relevant discussions, and challenging the firm’s governing body/management on how it is embedding the Duty and focusing on consumer outcomes. “On this basis, we want to provide firms with greater flexibility on their ongoing governance arrangements and from 27 February 2025 we no longer expect them to have a Duty champion, although they can retain the role should they wish to do so.” In a speech earlier this week, FCA CEO Nikhil Rathi said that the FCA was moving swiftly to cut red tape to support growth in financial services. In a speech to the Association of British Insurers, he said the regulator was working “at pace” to support growth initiatives. He said: “You may be surprised in the coming weeks at the pace we will move on the 50 or so growth proposals we made to the Prime Minister.” In a letter to the Prime Minister last month Mr Rathi pledged to “revolutionise financial advice” and achieve “deep reforms” to break down the barriers to business growth in financial services.

FCA axes Consumer Duty Champions rule

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