The new Duty is one of the biggest overhauls to UK financial regulation since the Retail Distribution Review.

The Duty will introduce a sweeping new set of rules which will require firms to do more to protect consumers from harm and bad financial decisions.

From July 2023, firms will be required to do everything possible to avoid “consumer harm” at every step of the customer journey.

Other than changing the timeline for implementation, the Financial Conduct Authority has not made any large changes to the overall Duty since it first published plans in December last year.

The watchdog said the Duty is designed to shift the mindset of firms.

The new rules are focused on the provision of value to consumers and evidencing it.

Under the new rules, which will come into force in July 2023, Financial Planning firms will be required to:

Under the new rules firms will be required to:

• Act in good faith towards retail customers
• Avoid foreseeable harm to retail customers
• Enable and support retail customers to pursue their financial objectives

The new Consumer Principle and Cross-cutting Rules are intended to deliver ‘good outcomes’ for products and services, price and value, consumer understanding, and consumer support.

Under the Duty Financial Planning firms will have to provide consumers with information they can understand, offer products and services that are fit for purpose, and provide helpful customer service.

Firms will also have to evidence what they are doing to meet the Duty.

The regulator says the new Duty will be underpinned by a concept of ‘reasonableness’, reflecting ‘the tortious concept of how a reasonable prudent firm would act and is one firms are already familiar with due to existing duties under common law’.

This means that it will be up to Financial Planning firms and the FCA to determine what is or is not reasonable, with details around the Duty and the impact on the market likely to evolve over time.

The FCA also made clear that it plans to work closely with the Financial Ombudsman Service to ensure that where complaints under the Duty have potentially wider implications, the ombudsman is aware what the FCA expects from firms.

The FCA’s final guidance to provide firms with the information to implement the Duty is available on the regulator’s website.