Podcast #75 - Consumer Duty: What it Means For a Broker

In episode 75 of the Growth Series podcast, Gurpreet Chahal, Corporate Account Manager at Accord Mortgages, speaks to Christine Newell, Mortgages Technical Director at Paradigm Mortgages, and Graeme Stewart, Head of Compliance Consultancy at Paradigm Consulting, about what the Consumer Duty means for brokers.

Gurpreet begins by asking Graeme how the official rules differ from what was outlined in the consultation paper. Graeme notes that the fact it has been pushed back from April to July is a key difference that should give firms lots of comfort.

However, he notes that the FCA has asked all firms to have an implementation plan ready no later than October 31st, which in essence, brings forward requirements of the Consumer Duty.

Gurpreet then asks what principles brokers and firms should focus on, based on the rules that have been released. Christine says the FCA is to tell firms they should expect to be asked to share implementation plans, brokers need to be ready for this.

Graeme adds that the FCA wants reassurances that firms are taking the Consumer Duty seriously, so their implementation plan must show they are taking the time to review their governance arrangements, and making sure rules are updated and aligned to duty requirements.

He also notes that the FCA will want to know that the leadership team and relevant staff are getting training on the Consumer Duty and what changes are expected, and also expect to see management information to evidence outcomes.

Gurpreet then asks what resources a firm will need for their implementation plan. Christine cites time as the key resource as the October 31st deadline is fast approaching, before stressing that the plan must be proportionate and relevant to their business.

Christine then discusses how firms can evidence their support for vulnerable clients, as this will be a key area that lots of firms will have on their implementation plan. She advises that a vulnerable client policy should be a working document which records details, such as the vulnerable client identification training process. This should aim to highlight how the training is carried out and how often it is completed. 

Gurpreet then asks Graeme how firms can make sure they have the required management information available. He says they must think about what management information is appropriate for their business, depending on its size and the nature of their client base.

He also states that firms must provide evidence that they are monitoring the implementation plan and set KPIs so they know what could trigger a review. Christine adds that firms shouldn’t delay drawing up their implementation plan, as this can take longer than they think.

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00:45 to 24:25:

• Introduction to the guests
• Differences between published Consumer Duty rules and consultation paper 
• What brokers should focus on
• What needs to be in your implementation plan
• What brokers need to do
• What management information do you need