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Intermediary magazine feature - Are consumer duty rules making a difference?

Journalist: Marc Shoffman, Freelance

ended 03. October 2023

Hi,  I am writing a feature for The Intermediary magazine looking at the first few months of the FCA's consumer duty rules.

I am looking for comments from people working across all property finance sectors, including: standard residential, BTL, specialist, short-term, development, second charge, later life, protection. 

I am keen to hear what changes have been made, how differently are you acting?

How has this first quarter progressed under the new rules for different market sectors?

 What lessons have firms learned during the early days that will affect how they adapt to the new normal moving forward? 

Was enough work done in the run up to the changes? 

Were some sectors/types of business more affected/prepared than others? What are some of the stumbling points people have identified now that the rules are a reality? Has the Consumer Duty even had an impact, so far?

9 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
We have made zero changes to our business. We already provided fair value, focussed purely on customer service with no targets. So for us, consumer duty required no action. It should however curb the behaviours of some firms who have been charging extortionate fees. Where the biggest changes will be seen however is more likely in lender product pricing and hopefully their service standards.
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Rob Heath
Director - IronMarket Wealth at IronMarket Wealth
If you consider why The Consumer Duty was introduced it was so clients get the support they need when they need it, communications are understood, and products and services meet their needs and offer fair value – well shouldn’t that have always been the case?

So with this in mind, I think you will probably find that the only people who have made major changes since the Consumer Duty launch are those who probably weren’t doing things right in the first place.

So for us, and I am sure many other firms, it has been more validating what we are doing, rather than changing.
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Mike Staton
Director at Staton Mortgages
Consumer duty rules should not make a difference to how people work, Brokers should have always aimed for a fair outcome and not just because a new piece of legislation states they should do so. The only negative I have towards the consumer duty is the numerous interpretations given to it by lenders and networks alike and the lack of a common sense approach towards compliance due to a fear of breaching consumer duty
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Jamie Alexander
Mortgage Director at Alexander Southwell Mortgages
The introduction of The Consumer Duty aimed to ensure that clients receive the necessary support, comprehend communications, and access products and services that align with their needs and offer fair value. One might wonder, shouldn't this have always been the standard?

In this context, it becomes apparent that the primary changes post-Consumer Duty launch have been adopted by those who may not have been adhering to best practices from the start.

For us, and likely many other firms, the introduction of the Consumer Duty has served as validation rather than a catalyst for transformation. We've made no substantial alterations to our business model. Our focus has always been on providing fair value and maintaining a customer-centric approach devoid of aggressive targets. Therefore, the Consumer Duty necessitated no immediate action on our part.
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James Bull
Mortgage Broker at JB Mortgages
Consumer duty only launched recently so it is too early to say the true impact it has had. Its launch coincided with the school summer holiday period and high interest rates so for many brokers, this is a quiet period. As rates start to get lower and the housing market picks up we may start to see a truer picture of consumer duties impact.
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Adam Smith
Founder at Alfa Mortgages
We've always prioritized exceptional client outcomes and fair value at the core of our business. While it's early to judge the entire industry, this term is widely discussed.
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Austyn Johnson
Founder at Mortgages For Actors
We already have taken this stance for years so it's no real change. We are now recording the 'above and beyond' that we do, so I think if anything, it will highlight any company's extra measures to make notes on their client's understanding. Quality will now be brought to the front.
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Dave Corbett
Head Of Protection at Protection 1st
It’s too early to call on this. Since consumer duty came in to force we’ve had a pretty stagnant housing market and the type of August we used to have every year before Covid where the market just dies on its backside.

It’ll take 12 months of good data but here’s hoping that life insurance sales and protecting client’s incomes are the big winners - for once the terminology used in the consumer duty rules should really help the protection industry push on.
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Gary Bush
Financial Adviser at MortgageShop.com
Consumer Duty to us basically encapsulated what we are already doing, it's a financial advice company's job to work in the best interests of clients and provide good outcomes. It has been a good opportunity to take another look at our processes, procedures, and feedback systems and has allowed us, through our bespoke technology, to implement a number of tweaks and improvements that some firms might call overkill. Having seen a large number of regulatory implementations in our 35 years of trading this seemed to us to be a sensible reboot of principles allowing us to look again and seek to expand our processes.