What is Consumer Duty?

It introduces a twelfth principle within the FCA’s Principles sourcebook and is the first addition since they were originally implemented.

At its simplest, Consumer Duty is aimed at providing better outcomes for our consumers (that’s our clients and members).

The exact Consumer Principle is; ‘A firm must act to deliver good outcomes for retail customers’ by specifically looking at four areas:  

1. Products and Services 

2. Price and Value 

3. Consumer Understanding 

4. Consumer Support  

They don’t need to take any action. There are no requirements or expectations for trustee boards to comply with or carry out any work in respect of the Consumer Duty regulations. The rules are for FCA regulated firms.

It’s worth noting that The Pensions Regulator has commented that it supports the FCA’s approach around Consumer Duty, and thus may consider introducing its own form of Consumer Duty for trustee boards in the future. 

They don’t need to take any action. There are no requirements or expectations for sponsoring employers to comply with or carry out any work in respect of the Consumer Duty regulations (unless they are subject to the Consumer Duty rules themselves as an FCA regulated business, however this would not impact their Workplace Investing pension scheme).

They don’t need to take any action. Consumer Duty means that members see even higher standards from the products and services we provide to them. We will need to continue to ensure we provide value for money, meet our members’ needs and continuously improve outcomes. Therefore over time, members can expect to see ongoing improvements as we constantly strive to do more. 

As you would expect, the implementation of the Consumer Duty Rules has been a key focus for Fidelity and we have had a large project running for some months with engagement at very senior levels in the business and with our relevant legal entity boards. We set up key workstreams including Product and Services & Price and Value and, Member Communications & Understanding; below is a brief summary of the work carried out and how this may benefit you and your members going forwards.

Under the Product and Services & Price and Value workstream we have critically assessed the performance of our products and services in delivering good member outcomes and value for money.

The pension products and services in scope of the Consumer Duty rules include the Group Personal Pension (GPP), Stakeholder Pension, Section 32 (Buy-out plans) and our full-service offering to standalone occupational pension schemes, including the Fidelity Master Trust and AVC plans.  Our investment solutions, including the full self-select fund range, FutureWise and, Investment Pathways are in-scope of the rules.

We have therefore been reviewing a magnitude of performance data covering all aspects of our pension products and services (operational, member usage of various tools/services, member experience, client experience, identifying any barriers to achieve good outcomes, investment performance net of charges), member feedback and complaint themes, as well as looking at member journeys and processes with a Consumer Duty lens. This enables us to consider evidence backed value for money assessments and to ascertain how our products and services are performing against the good outcomes our members should expect. For all of these, consideration is given for different groups of members too (including leavers and vulnerable customers).

Whilst none of this is new as we already constantly review our products and services, nor is it new for Fidelity to be continually improving member journeys and processes in light of member feedback and complaints; we are doing so with a Consumer Duty lens. This means evidencing everything we do in respect of these governance processes, documenting more objectively the performance measures around good outcomes including any potential foreseeable harms, and, value for money.

A summary of our value for money assessments recently conducted under the Consumer Duty rules can be found here.

Whilst we have always strived to ensure our communications are clear and not misleading to members, we want to do more to provide the best possible outcomes for our clients and members. We have therefore created our own Consumer Duty Toolkit, that includes the following:

• the training of Fidelity colleagues as Plain Numbers practitioners to ensure calculations and statistics in our member comms are easy to understand 
• refreshed Tone of Voice and copywriting guidelines to make sure all our comms are clear and simple to understand, and contribute towards member understanding and engagement 
• identification and review of key member journey collateral such as Wake-Up packs and Welcome, Transfers, and Retirement letters
• decision trees, materiality matrix and procedures around how to approach these key member journeys 
• our new comms research and testing capabilities, consisting of both in-person and digital member panels to review our key journey communications and provide direct feedback. 

The new regulations come into effect after 31 July 2023. From this date, all our communications will need to be considered through a Consumer Duty lens, and it may make take a little longer for us to ensure all member comms are reviewed appropriately. 

Fidelity has considered our vulnerable customers across every workstream under Consumer Duty. It’s worth highlighting that supporting vulnerable customers is not something new for us, we have been doing so long before Consumer Duty regulations were announced. Looking after all our customers is at the centre of our purpose and it’s something we are keen to continuously improve and further embed into our day-to-day processes across the business.

We can provide member documents in:

• Braille 
• Large Print 
• Neurodiverse Friendly 
• Audio CD

If your employees need any additional support, they can call us on 0800 368 6814 in the UK or +44 1737 838 585 from overseas. Our lines are open Monday to Friday from 8am to 6pm.

We also provide information on accessibility, including how to use screen readers and changing computer settings on our website at https://retirement-employer.fidelity.co.uk/accessibility/

After 31 July 2023, Workplace Investing will be ensuring that Consumer Duty is fully embedded into all our processes and considered as part of our day-to-day business. This means: 

• continued specialist training across the business
• regular and consistent reviews of our journey content and collateral 
• monitoring of inbound queries and calls from members to identify communications improvements
• additional internal feedback mechanisms around the performance of our products and services

Please get in touch with your Relationship Director to discuss any additional questions you may have.