The FCA confirmed that considering the cost-of-living crisis, there will be an increased focus on the price and value outcome, one of the four outcomes under The Consumer Duty.
Many firms feel confident they are in a good position to evidence the other three outcomes of the Consumer Duty, namely Products and Services, Consumer Understanding, and Consumer Support, whereas the Price and Value Outcome is proving more challenging to evidence, especially as value can be subjective. On a recent podcast, the FCA’s Head of Competition Policy, Ed Smith, explained that firms will need to ensure that the price their clients pay for a product or service is reasonable compared to the overall benefits that they receive. Firms will need to provide clear evidence to the FCA that they are meeting their obligations.
The FCA wants firms to assess the value clients receive and compare this against the price that they pay for the product over time. The overall goal is to make sure that the benefits realised are worth what the client is paying.
When assessing value firms should be looking at three key elements:
- Assessing price against the value to evidence a fair product for each client.
- Segmenting groups of customers to get different types of benefits at different prices for fair value.
- Monitoring what is driving the price both at a firm level and at the market level.
Although the FCA framework puts this into simple terms, the ins-and-outs of providing this evidence can be tricky, to say the least.
This video demonstrates how value is simpler than you may think using the moneyinfo app. Learn how to evidence that your proposition provides fair value to clients, using key features available in moneyinfo. If you're serious about The Consumer Duty and providing a bulletproof plan of action to make your business processes as efficient as possible, this is not one to miss.