What is Consumer Duty in UK: A Property Market Guide
Updated: Aug 9
Understanding the concept of consumer duty is crucial, especially in the property market. But, what is consumer duty in UK, and how does it affect the property sector?
Well, you're about to find that out, as well as why financial services firms must comply with this principle.
We'll delve into various aspects such as how to identify consumer pain points and understanding outcome information, to how financial services firms implement Financial Conduct Authority (FCA’s) Consumer Duty. But first, what is consumer duty in UK?
What is Consumer Duty in UK?
The UK Consumer Duty is a Consumer Principle recently introduced by the FCA. The aim of providing stronger customer care and ensure that products and services in the financial sector are designed to meet customers' needs, be marketed fairly, and deliver positive outcomes. The FCA's Consumer Duty begin date is 31 July 2023.
Let's delve into the key pillars of Consumer Duty and its impact on the property market.
Key Pillars of Consumer Duty in the UK
Consumer Duty means maintaining a higher standard in service outcomes. This duty applies not only to retail customers but all consumers, and it comprises four main principles:
Organization Successfully Implementing Consumer Duty
Consumer Duty requires financial services firms to act responsibly, and successfully implement FCA Consumer Duty to deliver positive customer outcomes.
Financial services and senior managers must provide services at reasonable and fair prices, without taking advantage of consumers. Transparent and fair pricing is fundamental to providing stronger consumer care, deliver positive customer outcomes, and by extension, maintaining Consumer Duty compliance.
Consumer Duty mandates equal and respectful treatment of all customers, without any discrimination or bias. It requires a successful financial services provider to provide a higher standard of care to everyone.
In case of complaints or issues, businesses must address them promptly and fairly. If consumers suffer losses due to any faults on the business's part, they're entitled to appropriate compensation.
The Consumer Outcomes of Consumer Duty
Help consumers make better decisions by giving them more information.
Build trust in the financial markets.
Encourage competition based on quality and price.
Deliver positive customer outcomes.
How Consumer Duty Affects the UK Property Market
Compliance with Consumer Duty means that these firms must identify consumer pain points and prioritise the interests of investors. The products and services provided should be tailored to their customer's needs, while being transparent about potential risks associated with investments.
Consumer Understanding Outcome Information
The essence of Consumer Duty lies in achieving positive customer outcomes. Property finance brokers, like Clever Commercial, must take responsibility for delivering results that align with the investor's objectives and an optimal services outcome.
3 Ways to Maximise the Benefits of Consumer Duty in the UK
Now, who doesn't like getting the most out of their benefits? To do that, we need to be smart about it. Here are some tips:
1. Take advantage of the perks
Whether you're entitled to warranties, refunds, or other consumer protections, don't leave any stone unturned. Take the time to read through the T&Cs of your purchases, services, or contracts, so you fully understand your rights and entitlements.
Many consumers often miss out on valuable benefits because they're not aware of them.
2. Strategic Expense Management
When you're entitled to certain reimbursements or claims, like business-related expenses or warranty-covered repairs, keep detailed records. Maintaining organised receipts and documentation for eligible expenses will make it easier for you to claim them later on.
Honesty and integrity should guide your expense management practices. Attempting to claim expenses that are not legitimate or trying to exploit the system may lead to legal consequences and damage your reputation.
3. Networking Opportunities
Consumer duty benefits in the UK can extend beyond financial perks. Networking opportunities can be one of the valuable and often overlooked benefits for consumers. Engaging in networking activities can lead to meaningful connections, both personally and professionally.
Consider attending relevant industry events, conferences, or seminars where you can meet like-minded individuals or industry experts. These events can provide a platform to exchange ideas, gain valuable insights, and open doors to new opportunities.
Moreover, with the advent of social media and online platforms, there are numerous virtual networking opportunities available.
The financial world is ever-changing, and so are the rules and regulations. The FCA's new consumer duty is a big deal. It means firms have to put your interests first and give you products that actually meet your needs. Ensure your broker is aware of their responsibilities and can clarify how they are adhering to the regulations.
Don't just rely on your broker though. Stay informed yourself. Subscribe to financial news outlets or sign up for newsletters from regulatory bodies. And hey, why not check out the Financial Times or Bloomberg Europe for some industry trends?
Remember, Tax laws and housing market reforms can sneak up on you and mess with your investments. Stay on top of it all.
Understanding and adhering to the Consumer Duty is a vital aspect of responsible financial management, particularly in the property market.
By understanding what is consumer duty in UK, the ideal consumer outcome and financial objectives, as well as service outcomes, you can stay informed and leverage benefits strategically. Doing so allows you to make smart decisions and achieve optimal outcomes in the dynamic property market.
Our firm successfully implements FCA's consumer duty by ensuring our senior managers take responsibility for delivering positive customer outcomes while maintaining transparency with clients about potential risks involved in each transaction.
Click here to see why people are using our services, and what we can do for you.