Steven Cameron, Pensions Director at Aegon said: “Aegon is pleased the FCA is open to simplifying its rulebook by removing duplication or unnecessarily prescriptive rules no longer needed post-Consumer Duty. We see scope to simplify rules around product disclosure and illustrations, to allow firms to design communications which truly help improve customer understanding and engagement. Consumers could also benefit if the FCA rules made it easier to move from paper-based to digital communications, which can be more engaging and allow firms to track actions taken by consumers to deliver better outcomes.
“Ironically, the consultation around the Value for Money Framework for workplace pensions which closed earlier this month includes particularly prescriptive rules which we hope will be simplified before going live. Looking ahead, we hope the willingness to rely more on outcomes-based regulation rather than prescription will shape the FCA’s approach to solutions flowing from the Advice Guidance Boundary Review, including targeted support. Overall, however, the Call for Input may be a little premature to reach firm conclusions. While we know the Labour Government were keen for the FCA to consult, certain aspects of the Consumer Duty only came into force in July and it may take more time to fully assess scope for simplification within an evolving regulatory approach.”
Michael Shand, managing principal at consultancy Capco: “This deadline is an important step in refining the FCA’s conduct rules and should be welcomed by the industry.“Rather than providing particularly detailed, prescriptive rules, Consumer Duty is centred on specific consumer outcomes. As a result, firms are required to interpret these outcomes and ensure—using data and evidence—that they are delivering against these consumer outcomes. The most mature firms will have already taken the opportunity to evolve into this way of working, streamlining their management and oversight of conduct. The review presents a limited opportunity for all firms and industry bodies to suggest specific areas for improvement.
“The potential future benefits include a clearer focus on improving consumer outcomes and reduced costs. However, the FCA must be cautious: simplifying rules and relying too heavily on high-level guidance could lead to ambiguity, as firms might interpret their conduct obligations differently. Before removing too many rules, the FCA should assess firms' maturity in embedding the Consumer Duty into their culture, recognising the many differences across firms and sectors.”
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