Contents
- Methodology to assess value for money in the unit-linked market
- FCA's key priorities for the financial advice industry
- PS22/12: Pensions dashboards rules for pension providers
- Borrowers in financial difficulty following the Coronavirus pandemic – key findings
- FOS quarterly complaints data on financial products and services: July to September 2022
- FOS ombudsman news issue 175
- LSB 2022 review of firms' adherence to CRM code for APP scams.
Methodology to assess value for money in the unit-linked market
Investment insurance products – costs and product governance
EIOPA has published a Methodology to assess value for money in the unit-linked market.
Various regulators have had long-running concerns about the value for money represented by this form of investment, which involves “Benefits... determined by reference to the performance of underlying linked investments... [and] often linked to open-ended, pooled investment funds...” (see the FCA’s Unit-linked funds’ governance review from 2018-2019).
EIOPA’s methodology follows on from its supervisory statement of a year ago, which stated that: “costs can have a significant impact on returns of all insurance-based investment products. And... unit-linked products which are not designed in a customer-centric manner continue to be a prominent area of concern, with [supervisory] authorities reporting a number of issues, such as: high complexity, mis-selling, [and] mismatches between actual returns and customers’ expectations.”
EIOPA’s methodology is intended to help member state supervisory authorities, and also “aims at providing more clarity for insurance manufacturers and distributors on the supervisory approach to addressing value for money risks when supervising product oversight and governance (POG) requirements.” The methodology has 3 ‘layers’:
- Market wide assessment... [to]identify products requiring higher scrutiny;
- Enhanced supervision... [to] determine whether products offer value or not;
- Assessment of... POG documents.
FCA's key priorities for the financial advice industry
Retail investment markets – Consumer Duty
In a speech to the Festival of Financial Planning, the FCA stated
“The Consumer Duty... will make it easier for us to intervene more quickly and effectively where we identify poor outcomes for consumers.
Customer outcomes, rather than technical compliance with rules,... need to become the focus of [firms’] thinking... [firms] will need to demonstrate that [they] have not facilitated... poor customer outcomes...
... the new Duty will require a cultural change... [which] cannot be achieved... by adjustments in governance, MI, and processes... firms’ senior management need to clearly demonstrate to... colleagues throughout their firm what putting good consumer outcomes at the heart of their business means...”
The FCA also emphasised that: “our Consumer Investments Strategy... has a vision of a market in which consumers can:
- Invest with confidence, understanding the risks they are taking, and the regulatory protections provided.
- Access and identify investments that suit their attitude to risk and circumstances.
- Be better protected from scams.
- Get advice or support to invest, should they want it.”
PS22/12: Pensions dashboards rules for pension providers
Pensions – consumer information - technology
The FCA has published a policy statement and rules, saying:
“Pensions dashboards will be secure digital interfaces where consumers can find and view simple information about their pensions (state, work-related and personal) that are not yet in payment.
... By equipping people with basic information about the pensions they have, consumers may find it easier to plan for retirement, get advice or guidance, and ultimately make informed decisions.”
“In summary, [the] new rules require that by 31 August 2023 FCA-regulated pension providers must:
- complete connection of their personal and stakeholder pension schemes to MaPS’ digital architecture [ie “governance and technology “ which results from the The Money and Pensions Service having “convened the Pensions Dashboards Programme (PDP) to develop and implement the infrastructure that will enable dashboards to operate”] in line with MaPS’ connection, security and technical standards and having regard to MaPS’ guidance on connection
- be ready to receive requests to find pensions, and search records for data matches
- be ready to return pensions information to the consumer’s chosen pensions dashboard (‘view’ data)”.
Borrowers in financial difficulty following the Coronavirus pandemic – key findings
Lending markets – guidance on customer fair treatment
The FCA has published a report in which it says that during the pandemic it “acted to help firms and customers manage the financial impact and ensured firms supported their customers who were struggling...
Guidance for firms to offer payment deferrals was quickly put in place, resulting in 1.8m mortgages and 3.4-4m consumer credit agreements having their payments deferred. Following this... we put in place the Tailored Support Guidance (TSG) for mortgages (MTSG), consumer credit (CTSG) and overdrafts...
The TSG is underpinned by our Principles for Businesses (the Principles) and existing rules in the relevant sections of our Handbook, in particular the Mortgages Conduct of Business (MCOB) and Consumer Credit (CONC) sourcebooks...
We reviewed firms’ policies and processes and spoke to them about their implementation of the TSG. We published a report in March 2021 that detailed our findings from this review. Our review at this early stage of firms’ implementation of the TSG found that firms had progressed well, acting quickly to build their capacity to support customers. We also identified some risks firms needed to address...”
The key element in the FCA’s latest report is firms’ engagement with customers: procuring that customers engage, and ensuring that the engagement is effective for each customer’s fair treatment.
FOS quarterly complaints data on financial products and services: July to September 2022
Complaints data
On 2 November 2022, FOS published its complaint data for those complaints resolved between July and September 2022 (Q2). The Service received 67,694 new enquiries and 38,470 new complaints across all product areas which shows a slight increase in enquiries but a reduction in complaints compared to Q1.
Complaints about credit cards and current accounts are the most complained about products for Q2 and equate to over 9000 complaints.
The uphold rate for complaints about balance transfers on credit cards is slightly above the average uphold rate (34%) at 40%. There was also a high level of enquiries about current accounts, more than any other product, at 8073 with 1263 complaints being referred to an Ombudsman for a decision.
Funeral Plans became a regulated activity in July 2022 and FOS has provided some insights into those complaints being received and outlined its approach to such complaints. It is clear from the data that enquiries and complaints received during Q2 in respect of funeral plans is 54.
FOS ombudsman news issue 175
Ombudsman newsletter
In the November edition of Ombudsman news, FOS announces the appointment of Jane Cosgrove as Chief People Officer who will be commencing the role in January having left the Civil Aviation Authority. She will be responsible for delivering the People Strategy and Learning and Development function.
Within this newsletter, FOS highlights its new guidance (available online) for customers and businesses in relation to mobile phone and gadget insurance and also provides a link to Pat Hurley’s recent talk on BBC One’s Rip Off Britain on fraud and scams. There is additional guidance on these types of complaint on its website. As travel insurance has been a hot topic since the start of the Covid-19 pandemic, the Service outlines trends in complaints and some useful points for insurers.
LSB 2022 review of firms' adherence to CRM code for APP scams
APP fraud
The Lending Standards Board published its 9th edition of its bulletin in which it includes its latest review of signatory firms’ adherence to the Contingent Reimbursement Model Code (CRM Code) for Authorised Push Payment (APP) scams.
The review evaluated signatories’ application of the Code’s provisions across the customer’s entire payment journey. It concluded that firms have placed an increased focus on scam prevention and enhanced digital effective warnings, amongst other areas of good practice that were found. The review went on to set out areas of focus moving forwards to further strengthen customer protections, such as enhancing customer communications and conducting further work to support vulnerable customers.
Authors

David Henderson
Senior Associate

Jeremy Irving
Partner

Lisa Wright
Barrister (Senior Associate)
Discover more
You may be interested in...
Published Article
Three peaks of consumer protection: Part two — intolerable harm
Published Article
The three peaks of customer protection: How ‘operational resilience’ enables compliance with the ‘Consumer Duty’ and ‘Vulnerable Customers’
Legal Update
AI modelling biases in quote engines
Legal Update
Pitfalls for retailers to avoid when offering access to ‘buy now, pay later’ products
Published Article
Consumer duty part 3 - 'The drill-down' into the 'cross-cutting' rules
Legal Update
Code of Conduct for ESG data and ratings providers – bridging the authenticity gap
Legal Update - ESG in 3D
ESG in 3D, December 2022
Legal Update
Code of Conduct for ESG data and ratings providers
Legal Update
All the pieces of the conduct puzzle: Governance, culture, D&I, innovation
Legal Update
Voluntary offset markets for carbon – a bad atmosphere?
Article
‘Decentralised and autonomous’ – evolution or misunderstanding of unincorporated association law?
Legal Update
The FCA’s anti-greenwash proposals
Legal Update
Disability and access in banking
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 4 November 2022
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 28 October 2022
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 7 October 2022
Published Article
Consumer duty part 1 - 'The drill-down' into the 'cross-cutting' rules
This article is the first in a series aimed to help firms get to grips on a practical basis with the ‘cross-cutting rules’ within the new ‘Consumer Duty’ framework.
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 30 September 2022
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 23 September 2022
Legal Update
FCA warns that vulnerable to scams amid cost of living crisis
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 26 August 2022
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 19 August 2022
Legal Update - The Uplink
The Uplink: Financial services regulatory news, 22 July 2022
Legal Update
The new Consumer Duty in a nutshell
Legal Update
Should the UK Financial Conduct Authority bring "competitiveness" back into its regulatory agenda?
Opinion
ESG for Beginners
As you probably know by now, the acronym 'ESG' stands for environmental, social and governance. Although the investment community initially coined the term, it has grown into a larger concept that can be applied more broadly to any business or practice.
Published Article
General insurance conduct and enforcement risk: Alsford Page & Gems Ltd - reading between lines on root causes of censure
Opinion
Credit broking: know your permissions
Press Release
Browne Jacobson advises on sale of TCL to idverde Group
Browne Jacobson has advised BGF and the shareholders of long-standing client TCL Group on the sale of the TCL business to idverde Group.
Published Article
Is insurance the new banking? Part 3: Inappropriate personal behaviour, and conduct risk, in the Lloyd’s Market
Legal Update
Legal and regulatory newsletter - October 2019
The aim of the newsletter is to provide our clients and contacts across the financial services market with quarterly updates and insights on topical legal and regulatory issues.
Legal Update
FCA considers regulating all promotions and warns of “high risk” mini-bonds and peer-to-peer IFISAs
Following an “explosion” in online promotions for high yield investment opportunities, the FCA says a “strong case” could be made for regulating how investment products are marketed to retail investors.
Legal Update
The disappearance of LIBOR
Companies should undertake a comprehensive review and audit to identify those products and legacy contracts that are LIBOR-linked and carry out an in-depth risk assessment of discontinuation. Where possible, companies should look at appointing an individual to oversee the programme.
Published Article
Is insurance the new banking? Part 2: outsourcing issues
This series of articles explores the extent to which the general insurance (“GI”) market has recently become a primary target of regulators’ activities, or is merely the ‘collateral’ victim of banking regulation.
Legal Update
The biggest change to the UK companies register since 1844?
On 5 May 2019 BEIS (the Department for Business, Energy & Industrial Strategy) published a consultation on options to enhance the role of Companies House and increase the transparency of UK corporate entities.
Published Article
Is insurance the new banking? Part 1: GI market and SM&CR
The UK general insurance market has for some time now been experiencing significant regulatory scrutiny, even pressure. There has been particular focus on the intermediation that procures customers' agreements with insurers, and the influence of intermediation on claims.
Opinion
Brexit: Accounts and financial reporting – have you assessed the possible impact on your business?
Despite all of the media attention around Brexit, very little is being said about the effect of Brexit on the accounting and financial reporting requirements for businesses operating cross-border.
Legal Update
Modern Slavery Act 2015 – latest developments
Momentum is gathering in the call to take a tougher approach to how large businesses tackle modern slavery issues in their supply chains.