Consumer Duty (PRIN 2A, FG22/5)

PRIN 2A introduced the Consumer Duty for retail business. The rule took effect on 31 July 2023 for new and existing products and on 31 July 2024 for closed-book products. FG22/5 is the FCA’s finalised guidance on applying the Duty.

For principal firms, the Duty applies at the principal level for all retail business carried on by ARs within scope of their appointment. The principal cannot delegate Consumer Duty obligations to the AR; the AR is operationally relevant, but the regulated firm is the principal.

This page maps the four Consumer Duty outcomes to network supervision and to product surfaces.

Outcome 1: products and services

The principal must be satisfied that products distributed by ARs are designed for, and reach, an identified target market.

Network supervision implication. ARs in a principal’s network may sell across multiple product lines and target markets. The principal needs visibility on which products each AR is distributing and whether the customer base each AR is reaching matches the product’s target market.

Product surface. The AR detail Overview tab captures the AR’s product set against target-market definitions. The file-review rubric flags target-market drift (a product distributed to customers outside the defined target market) as a finding. The annual fitness review packet’s Consumer Duty section summarises product-fit indicators for each AR.

Outcome 2: price and value

The principal must be satisfied that ARs are not undermining fair value through fees or commission structures.

Network supervision implication. Commission-driven ARs can introduce price-and-value risks the principal does not see directly. Fee-bearing events at the AR level need to be visible to the principal for the fair-value test to be defensible.

Product surface. The MI return collects fee-bearing event volumes per AR. The principal home page surfaces an aggregated view; the AR detail page shows the AR’s fee-bearing event trend over the rolling 12 months. Variance between ARs on fee structure is a flag in the file-review rubric.

Outcome 3: consumer understanding

The principal must monitor whether AR customer-facing communications support understanding.

Network supervision implication. AR communications are often produced at the AR level, with brand and tonal latitude inside principal-issued templates. The principal needs sampled visibility on real customer-facing communications.

Product surface. The file-review rubric includes a communications-quality section per vertical (MCOB, ICOBS, CONC). The reviewer scores clarity, balance, and absence of misleading framing. Findings aggregate to the AR’s profile and roll up to root-cause analysis at firm level.

Outcome 4: consumer support

The principal must ensure ARs do not erect unreasonable barriers to acting in the customer interest.

Network supervision implication. Support quality at the AR level (response times, complaint-handling friction, product-switching friction) is invisible to the principal without active monitoring. The principal needs indicators that surface support quality across the network.

Product surface. Complaint root-cause analysis is the principal indicator. The file-review rubric covers customer support touchpoints including switching, cancellation, and vulnerable-customer support. The complaints log feeds the consumer-support outcome KPI on the principal home page.

The annual board report

The Consumer Duty requires the firm’s governing body to receive at least an annual board report on Consumer Duty outcomes. For a principal firm, that report aggregates outcomes across the AR network.

The annual fitness review packet’s Consumer Duty section is the per-AR input. For each AR, the section captures:

• Product-fit indicator and target-market drift findings.
• Fee-bearing event trend and any fair-value flags.
• File-review communications-quality average.
• Complaint volume, outcome breakdown, and consumer-support indicators.

The firm-level board report is built from the per-AR sections plus firm-level controls (sampling rules, training programme, complaints handling). The board-report builder is engineering-spec depth in v1; the per-AR inputs are live.

Director sign-off

Consumer Duty board report sign-off is a separate audit object from SUP 12.6A self-assessment sign-off. Both signing events are captured by AuditEvent entries. The annual review packet supports both routings; a single sign-off may close out both obligations where the packet content covers both purposes. See Annual self-assessment for the combined cycle.

Cross-links

• Annual self-assessment for the combined SUP 12.6A and PRIN 2A annual cycle.
• Vulnerable customers for FG21/1 outcome equivalence, which interlocks with all four Consumer Duty outcomes.
• DISP 1 for complaint root-cause analysis feeding the consumer-support outcome.