Target Newsletter - Issue 186 February 2023

meet the needs, characteristics and objectives of a specified target market • Price and Value: Products and services provide fair value with a reasonable relationship between the price consumers pay and the benefit they receive • Consumer Understanding: Firms communicate in a way that supports consumer understanding and equips consumers to make effective, timely and properly informed decisions. • Consumer Support: Firms provide support that meets consumer’s needs throughout the life of the product or service. The FCA highlights also that a key part of the Duty is that firms are able to define, monitor, evidence and stand behind the outcomes their customers are experiencing. This monitoring* must enable firms to identify where customers, or groups of customers, are experiencing poor outcomes, and where this is the case firms must take appropriate action to rectify the situation. *Paradigm will be supporting firms with a monitoring, or reporting template to meet this requirement, following the implementation of the Duty. We will publish this in good time ahead of the implementation date. Four key FCA Concerns Whilst firms must be ready to address all the elements of the Duty, the letter sets out four areas where particular focus is needed. Mainstream investments: The FCA believe that consumers are at risk of receiving services that do not meet their needs or represent poor value, which may be due to the nature of the service(s) they are receiving and/ or the underlying charging structure. Higher risk investments: The FCA comment that some consumers continue to be invested in unsuitable high risk investments. Firms need to make sure that their products and services are appropriately designed

for the needs and objectives of their target market, and that they are properly designed for the needs and objectives of their target market and that they are being promoted and distributed effectively. Scams and Fraud: The FCA believe that too many consumers are losing money due to scams and fraud. Firms must act to avoid causing foreseeable harm to their customers and take appropriate action to help stop consumers falling victim to scams and fraud. Consumer Redress: The FCA expect firms to act in good faith when they identify they have caused harm (either through their actions or inactions) and to take appropriate proactive steps to rectify the situation, which may include customer redress, which where due should be paid promptly. The FCA mention that they have updated firms following their review of larger firms’ implementation plans which we provided firms with a compliance update on 3rd February. Further things to consider The remainder of the letter’s two annex’s deal with the four Duty outcomes, in more detail. Firms will be actively working on each of these outcomes as they follow their own implementation plan.

PARADIGM COMMENT All our support and guidance to firms on the Duty, continues to be held in one easy access, central location which is the “Hot Topics” section of our website. If you have any queries, or need further assistance, please contact your usual Paradigm Consultant or helpdesk@ consultparadigm.co.uk .

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