Both papers are designed to ensure there are no gaps in protection for consumers in the financial sector, said the FCA.
The discussion paper considers whether there is a need for a specific duty of care requirement for firms in financial services. It explores whether a new duty of care could enhance good conduct and culture and provide additional protections for consumers.
If changes are required, the paper asks what those changes could look like and what the impact would be for consumers, firms and the FCA. It also explores what the possible alternative approaches to a new duty might be.
The 45-page Approach to Consumers document sets out the FCA’s expectations, first published for consultation in 6 November 2017, on how consumers should be treated by financial firms and where the FCA will intervene if things are going wrong.
It gives a further insight into the wide range of powers the FCA has at its disposal to ensure consumers are protected, particularly some of the most vulnerable people in society.
The paper sets out the FCA vision of what a well-functioning market looks like, when and how the FCA will act to protect consumers, and its policy positions on key issues.
Increasingly complex environment
Andrew Bailey, chief Executive at the FCA, said: “Consumer protection is absolutely central to the FCA’s purpose and mission. Nearly everyone at some stage in their life will come into contact with a financial organisation and people need to know that they are being treated fairly and that the right protections are in place.
“Different groups of consumers have different financial needs, which will naturally change over their lifetime. As we have demonstrated in the past we will act to address harm or potential harm using the range of powers and tools at our disposal to protect consumers.
“To ensure we provide the necessary protections and deliver good outcomes for consumers we need to regularly review our approach, so we can reflect the diverse population of the UK and consumers’ changing needs in a rapidly-evolving and increasingly complex environment. The papers published today are part of this continuing work.”
Th regulator seeks comments from industry stakeholders on the Duty of Care paper by 2 November 2018.
The FCA also confirmed plans to consult early next year on guidance for firms to help them understand more clearly its expectations and requirements for dealing with vulnerable people.
See the DP 18/05 discussion paper here.