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Everything you need to know about Consumer Duty

Sponsored feature | Rachel Sackel, Mortgage Advice Bureau

Rachel Sackel, Mortgage Advice Bureau
Rachel Sackel, Mortgage Advice Bureau

Described as one of the biggest shake-ups in the financial services industry, Consumer Duty is set to change the way companies help their customers.

Now it has arrived, you may be wondering how it is going to affect you as a home owner (or prospective home owner). At its core, it’s about protecting your financial security and while we have always had you at the heart of our business, we’ve taken some extra steps to make sure we can support you.

Support can mean a lot of different things, so we wanted to break down some of the core principles of Consumer Duty and highlight why this is an important change in the financial services industry.

What is Consumer Duty?

Consumer Duty is a set of regulations outlined by the Financial Conduct Authority (FCA), and seeks to ensure that customers receive ‘good outcomes’ wherever possible, and that firms are providing evidence to prove that these outcomes are being met.

These new rules apply to all firms who ‘determine or have material influence over customer outcomes’. As mortgage advisers, we fit right into this. We help you secure mortgages for your home, whether it’s your first property or your fourth.

Our main job is making sure we can get you a mortgage that suits your individual needs and circumstances, to do this, we need a good understanding of your financial situation. We take these into account when sourcing products for you, and we strive to ensure good outcomes for all involved.

What do good outcomes mean?

Under Consumer Duty, companies need to provide customers with products and services that meet their needs and offer fair value. This includes the way we communicate, and all communications should occur in ways that are easy to understand. Finally, a good outcome absolutely means that you can get the customer support you need, when you need it.

These rules apply to all firms who ‘determine or have a material influence over customer outcomes - not just those with a direct customer relationship’.

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The three principles of Consumer Duty

The FCA’s rules introduce three new elements, which all financial firms will need to embed into their business practices. These include:

A new consumer principle:

- Firms must always act to deliver good outcomes for clients.

Three core rules:

- Act in good faith towards customers

- Avoid foreseeable harm

- Enable and support customers to pursue their financial goals.

Four key areas affected:

- Products and services

- Price and value

- Consumer understanding

- Customer support.

In companies that already offer advice, these principles would already be deeply embedded into the company ethos.

How does Consumer Duty affect you?

Put simply, it shouldn’t affect you much at all. In fact, if you’re going to see changes, they will be positive ones. The onus is on firms to put the work in, not you.

Consumer Duty protects you, and will have a massive impact on how the industry behaves and serves its customers. Consumer Duty also aims to protect vulnerable customers, or those who are particularly susceptible to detrimental effects due to their personal circumstances.

Examples could include:

- You have just lost your job and can’t afford your bills

- You are grieving the loss of a loved one

- You are unfamiliar with digital technology and find online customer support systems challenging to navigate

- You are coping with an ongoing chronic physical or mental health condition

- You have a learning disorder.

The above examples are certainly not exclusive, and vulnerability can look different to different people. Everyone’s circumstances are unique, which means that the work we do to support you should be unique.

We’ve set up some resources and guides you can take advantage of should you need to, so be sure to check out the vulnerability pages on our website if you have any questions or queries.

How we can help you

Ultimately, it’s about looking beyond data and technology, and going above and beyond regular compliance. Customers have always been at the heart of our business, and we’re eager to explore how we can offer even more value to you and the mortgage industry as a whole.

Some of the exciting initiatives we’re working on that can be found on our website include:

- Tackling the mortgage crunch - your go-to resource for all things cost-of-living and mortgages

- The Green Hub - the one-stop shop for sustainability news, articles, and research

- Mortgage Monitoring - an easy way for you to keep on top of your mortgage, with monthly home reports and notifications when better deals become available

- The MyMAB app - Looking to buy your first home? Our app is a handy resource, packed with checklists, trackers, and articles to help you on your path to homeownership. Get it free on Google Play or the Apple Store.

If you have any questions, concerns, or just want to have a chat about your mortgage, get in touch with us today. We’re always more than happy to speak with you. Call 01223 300151 or visit our website at mortgageadvicebureau.com/cambridge.

Because we play by the book we want to tell you that your home may be repossessed if you do not keep up with repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances, but a typical fee is up to 1 per cent of the amount borrowed.

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