Mind the Gap: Is the FCA's new Consumer Duty in CP21/13 worth the cost?

In this series of articles, we explore some of the topical issues raised by the FCA’s recent Consultation Paper on “A New Consumer Duty” (CP21/13) and its potential practical implications on firms. The new Consumer Duty marks a radical change to the FCA’s expectations of firms, that may have far-reaching consequences. In particular, there are  a number of question marks as to proportionality, necessity and cost-benefit, with fears that the FCA may have over-estimated the size of the gap in protection that this would fill and under-estimated the cost to firms of implementation and ongoing monitoring. With responses to the consultation due by the end of July, firms need to act now to make their voices heard. In this article, we present our views on some of the key issues arising from the FCA’s current formulation of the Consumer Duty, including potential unintended consequences.