The UK Financial Conduct Authority (FCA) has outlined its Consumer Duty priorities for 2024/25, focusing on ensuring that financial services firms deliver better consumer outcomes and enhance compliance practices. The priorities highlight specific areas for improvement, including the treatment of vulnerable customers, governance oversight, and management of platform cash balances.

Key Focus Areas for 2024/25

The FCA’s Consumer Duty priorities are grouped into three cross-cutting projects, alongside additional targeted work on platform cash treatment. These projects are expected to culminate in a series of publications in Q4 2024 and Q1 2025.

1. Review of Board/Governing Body Reports and Complaints Analysis

The FCA will assess how firms are meeting outcome monitoring requirements, with a particular focus on:

• Board and governing body reports: How firms report on Consumer Duty compliance and monitor outcomes.

• Complaints and root cause analysis: Evaluating how firms leverage insights from customer complaints to identify systemic issues and improve business practices.

  
  

This review aims to ensure firms are proactive in identifying risks and addressing concerns before they escalate.

2. Treatment of Customers in Vulnerable Circumstances

Recognising the importance of protecting vulnerable customers, the FCA will examine:

• How firms identify and support customers in vulnerable circumstances.

• Whether firms' processes and strategies align with Consumer Duty principles to ensure fair treatment.

  
  

This initiative highlights the regulator’s commitment to ensuring that no consumer is disadvantaged based on their personal circumstances.

3. Consumer Support Outcome and Informed Decision-Making

The FCA will review how firms enable customers to make informed decisions by:

• Assessing the consumer support journey, ensuring effective communication at each stage.

• Evaluating whether firms’ communications promote informed decision-making and transparency.

  
  

This project underscores the importance of clear, accessible information for consumers to make confident financial choices.

4. Platform Cash – Treatment of Interest on Cash Balances

The FCA is prioritising concerns regarding how investment platforms and SIPP (Self-Invested Personal Pension) operators handle interest earned on customers' cash balances. Specific areas of focus include:

• Reviewing how firms manage interest on cash balances and ensure fair treatment of customers.

• Engaging directly with firms where concerns about practices have already been identified.

  
  

This targeted work aims to address potential gaps in fairness and transparency for consumers.

Why This Matters

The FCA’s renewed focus on these priority areas signals its ongoing commitment to ensuring firms not only meet regulatory requirements but also act in the best interests of consumers. Firms are expected to proactively review their governance, customer support practices, and treatment of vulnerable customers to align with Consumer Duty principles.

How j. awan & partners Can Help

At j. awan & partners, we understand the complexities of the evolving regulatory landscape. We specialise in helping firms:

• Conduct thorough compliance assessments aligned with FCA priorities.

• Enhance governance frameworks, including board reporting and complaints analysis.

• Develop strategies to support vulnerable customers and improve consumer journeys.

• Ensure fair practices in areas such as platform cash management and consumer communications.

  
  

Conclusion

The FCA’s Consumer Duty priorities for 2024/25 provide a clear roadmap for financial services firms to improve outcomes for their customers. Firms must stay vigilant, proactive, and ensure their operations align with the FCA’s expectations.

Let’s Talk!

At j. awan & partners, we are committed to supporting our clients in navigating these regulatory challenges with confidence.

Contact us today to discuss how we can help you stay ahead in compliance and deliver exceptional customer outcomes.

Read the full FCA announcement here: Our Consumer Duty focus areas