The FCA's consumer duty proposals will apply to many asset managers, but they seem to have been prepared with large-scale retail banking and lending front of mind. The FCA's second consultation doesn't present a clear picture of the issues in the asset management space that the consumer duty is intended to address.

This leaves firms without a set of purposes or aims that they can keep in mind to navigate the substantial uncertainties in relation to the application of the proposals to the asset management space.

These include questions about the interaction between the consumer duty and existing consumer protection Principles and rules; how obligations will be appotioned throughout asset management distribution chains; cross-border transactions and extra-territoriality; and application to back books and closed products.

Regulatory uncertainty means regulatory risk - so asset managers should take particular care to prepare, including by evaluating their existing product offerings and by establishing arrangements to monitor consumer outcomes. The FCA is suggesting an implementation period of just nine months after the rules coming into force at the end of July 2022. 

For the details and suggested steps that asset managers can take now, listen to our podcast episode on the implications of the second consultation paper for asset managers.

 And for all our resources, visit our consumer duty webpage.