Firms are needlessly ‘gold plating’ Consumer Duty rules, FCA says

Tuesday 09 September 2025 1:00 am
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Monday 08 September 2025 3:27 pm

Scores of economic companies corporations are needlessly “gold plating” their compliance with Client Obligation guidelines, the monetary watchdog’s coverage chief has claimed, because the regulator pushes again over issues the principles have turn out to be too burdensome for companies.

Charlotte Clark, director of cross-cutting coverage and technique on the Monetary Conduct Authority (FCA), admonished corporations who went “above and past” Client Obligation necessities, warning that the strategy was “not within the shopper’s curiosity.”

“Definitely inside some corporations we’ve seen this overinterpretation and gold plating over a number of the compliance exercise,” Clark advised the Following the Guidelines podcast, including that “issues need to be carried out in a proportionate means.”

“In the end it’s not within the shopper’s curiosity for the agency to be doing extra work above and past, simply to show that the patron’s wants are being met. That simply provides value to the system.

“Folks need to go above and past? That’s a matter for them, however we’re hoping that we’ll have the ability to make clear what are the expectations right here.”

Reeves weighs in over Client Obligation

The remarks come because the FCA prepares to set out a programme of labor to “simplify” compliance with the Client Obligation, a algorithm applied final 12 months geared toward setting stricter requirements of shopper safety throughout monetary companies.

In March, the FCA vowed to “tackle longstanding issues” from companies “concerning the size and complexity of our guidelines and steerage” in a bid to scale back the executive burden the principles had positioned on companies. 

The watchdog mentioned it might search to enhance flexibility on methods to implement the principles, “enhance predictability” on its regulatory priorities and make the compliance course of extra environment friendly. 

In July, Chancellor Rachel Reeves joined a refrain of companies who warned over the onerous regulatory burden of the principles, urging the FCA to undertake a extra pro-growth perspective.

“The Monetary Conduct Authority’s shopper responsibility guidelines had been additionally supposed to lift requirements in how finance corporations deal with retail shoppers, however right now have an effect on the best way companies work together with different companies — equivalent to funding banks and asset managers,” she mentioned.

“The Monetary Conduct Authority will due to this fact assess how the patron responsibility applies to those wholesale corporations.”

Clark mentioned the regulator had “carried out loads of engagement” with wholesale corporations to make sure the Client Obligation was not needlessly complied with in areas the place it was “not related.”

She conceded that there was a “sure onus” on the FCA to present higher readability on methods to interpret the principles to supply reassurance to companies, ”moderately than feeling like they need to go above and past with the intention to be assured that truly the regulator wouldn’t take motion.”

“I’m not simply saying to corporations, ‘oh you’re overinterpreting the principles right here’. There’s something about us and our communication and us being clear about what is nice sufficient right here,” she mentioned.