The annual Consumer Duty board report is the single document that most clearly reveals whether a firm has implemented the Duty or merely mapped it. Supervision reads it as a test of governance quality: does the board see outcome data, does it understand what the data shows, and does it act.
What the report must do
The rules require the governing body to review and approve, at least annually, an assessment of whether the firm is delivering good outcomes for its customers consistent with the Duty. The assessment should include the results of monitoring, evidence of any poor outcomes and the action taken, and an assessment of the firm's future business strategy against the Duty.
That last element is frequently omitted. The Duty is not only retrospective. The board must consider whether planned strategy, pricing, product changes or growth create foreseeable harm.
Outcome metrics that carry weight
| Outcome | Weak metric | Metric that evidences outcome |
|---|---|---|
| Products and services | Number of products reviewed | Proportion of sales outside target market, and what happened to those customers |
| Price and value | Margin analysis | Distribution of value across cohorts, including low-usage and long-tenure customers |
| Consumer understanding | Communications approved | Comprehension testing results, and behaviour after communication |
| Consumer support | Average call handling time | Abandonment rates, resolution at first contact, friction in cancellation versus purchase |
| Vulnerability | Staff trained | Outcome comparison between vulnerable and non-vulnerable cohorts |
The recurring test is asymmetry. If it is materially easier for a customer to buy than to cancel, to increase a limit than to reduce it, or to reach sales than to reach support, that asymmetry will be read as a design choice.
Segmentation is the point
An aggregate complaint rate of two per cent tells the board nothing about whether a particular cohort is being harmed. Useful segmentation includes acquisition channel, product variant, tenure, usage level, customer vulnerability characteristics and, where relevant, price paid relative to the average.
The most common significant finding in outcomes testing is a cohort that performs materially worse than the population and that no one had previously isolated: long-tenure customers on legacy pricing, customers acquired through a single introducer, or customers who never use the feature they are paying for.
Evidencing vulnerable customer outcomes
Reporting that staff have been trained in vulnerability is process evidence. What the Duty requires is comparison: do customers with characteristics of vulnerability experience worse outcomes in complaints, arrears, cancellations, claim acceptance or support resolution, and if so what has been done. Where a firm does not capture vulnerability data at all, that itself should be reported as a gap with a remediation plan.
Writing the report
Four principles produce a report that stands up.
- State conclusions, not activity. Each outcome should carry a clear assessment.
- Show the data behind each conclusion, with trend and segmentation.
- Be candid about poor outcomes. A report with no problems identified is not credible in any business of scale.
- Record decisions. Where the board accepted a finding without immediate action, the reason should be minuted.
The minute matters
The board minute should evidence that directors questioned the data, tested assumptions, requested further analysis where needed and set review points. A minute recording that the report was "received and approved" undermines an otherwise strong report.
Our Consumer Duty implementation guide covers the underlying framework, and our guidance on FCA supervisory priorities sets the Duty in the wider supervisory context.
About Regulatory Counsel
Regulatory Counsel advises UK and international financial services firms on authorisation, prudential and conduct requirements, governance, financial crime and regulator engagement.
Our Consumer Duty work covers outcomes monitoring framework design, metric and segmentation design, fair value assessments, vulnerability frameworks and testing, drafting and independent review of the annual board report, and board challenge material.
Contact our regulatory team at info@regulatorycounsel.co.uk.
This article is provided for general information and does not constitute legal or regulatory advice. Firms should confirm the current position against FCA publications and take advice on their specific circumstances.
Frequently Asked Questions
An assessment of whether the firm is delivering good outcomes consistent with the Duty, the results of outcomes monitoring, evidence of any poor outcomes and the action taken, and an assessment of future business strategy against the Duty.
At least annually. The governing body must review and approve the assessment and be able to evidence that it applied challenge to the findings.
Metrics that evidence results rather than activity, such as sales outside target market and their consequences, value distribution across customer cohorts, comprehension testing results, support friction measures, and comparison of outcomes for vulnerable customers.
Because aggregate figures conceal cohorts receiving materially worse outcomes. Segmenting by channel, product variant, tenure, usage and vulnerability is usually what surfaces the harm the Duty is designed to address.
Describing activity undertaken rather than assessing outcomes achieved, presenting unsegmented data, and recording board approval without evidence of challenge in the minutes.