Afternoon all. Mike here. I’m taking control of the weekly update whilst Mark puts up the Christmas decorations in anticipation of the first lang cat office party for two years tomorrow afternoon. Apologies in advance to anyone I bounce to voicemail on Friday morning….

My favourite part of any James Bond movie is when he visits Q to pick up some shiny new weapons. Sure, 007 could get the get the job done with the tools he currently has at his disposal, but that would be boring. It’s much more fun to create something new that will strike fear into your adversary, and I’d imagine it’s much easier too. Why work harder to make what you’ve already got work, when you can give the baddies a good shoeing with something nice and new?


All of which leads me seamlessly to the latest Consumer Duty paper from the FCA. Released at 7am (why?) yesterday morning, with a printer jamming 243 pages to digest, this consultation is very much the FCA tooling up for the battle ahead.

Fans of the first paper from last summer will be pleased to note that little has changed from the initial proposals. The wording for the overall high-level principle has been confirmed as A firm must act to deliver good outcomes for retail clients”. There are a few tweaks to the wording for the cross-cutting rules and the four outcomes, but the intentions are broadly the same. While it is still a consultation, the most notable difference from last time is the exclusion of a potential Private Right of Action for breaches of the Consumer Duty. It had been a contentious topic and the FCA now proposes not to proceed with it at this time.

So, what to make of it all? At the lang cat we try to avoid regulatory hyperbole, repeatedly crying wolf that the next regulatory change is going to be a big thing, but this does actually feel like it could be a big thing. The scope includes pretty much anyone who is reading this email (apart from you Mum) with explicit mentions for firms who don’t have a direct relationship with the end client and providers who have consumers in products that are closed to new business but remain invested.

For some firms, the three cross cutting rules, (requiring firms to [1] act in good faith towards retail customers, [2] avoid causing foreseeable harm to retail customers, and [3] to enable and support retail customers to pursue their financial objectives) will require a fair bit of work to implement, especially when you remember they will be enforceable rules. And all that’s before you get to the four main outcomes.


If you read any part of the paper (and you really should read it all) I’d suggest you start on page 120 with the guidance section. This sets out good and poor practice examples for the new Consumer Duty principle, the cross-cutting rules, and all four outcomes. All the outcomes will impact firms, but for advisers and providers the consumer understanding, consumer support and price/value outcomes could be particularly irksome. The FCA is expecting this work to “drive a fundamental shift in industry mindset”, and this guidance sets out how this will need to happen.

In recent years, much criticism has been aimed at the FCA regarding the lack of guidance and good/poor practice examples for its numerous consultations. It is good to see the regulator listening and including a lengthy and clear section to this effect. This feels like an area where it can’t do too much, and considering the broad scope of the Consumer Duty, sector specific guidance would be welcomed by all.

So, lots to ponder. With the consultation closing mid-Feb 22, and the lack of change from the first paper it doesn’t seem like the FCA is up for much of a debate, but if you want to get involved in the consultation now is the time to do so. The final rules are due in July, with implementation around April 2023. This is certainly a topic we’ll return to at a later date.


Mark gets very grumpy when things are announced on a Thursday, instead of giving him a nice easy topic for the Wednesday update, so it was with some amusement I noticed Abdrn’s proposed acquisition of Interactive Investor landing in my in-box last week.

The D2C market is really interesting at the moment – loads of firms reporting stellar client growth, and the big four (Hargreaves Lansdown, AJ Bell, Interactive Investor and Vanguard) have acquired over 400,000 new clients this year alone. Perhaps most significantly, Vanguard picked up 36,000 new clients in Q3, beating both Hargreaves and AJ Bell combined. With these growth rates, and client retention rates consistently above 90%, it’s easy to see why Abrdn fancies a bit of the action. Sadly, it also serves to show why Wealthsimple, which only managed to acquire 16,000 customers since its launch in 2017 has shut its UK operation. It’s an increasingly competitive market …


  • Steve Nelson talks to Petronella West, Investment Quorum’s chief executive on HomeGames at 12.30 today. The evolution of the advice profession and Petronella’s work with Street Child in Sierra Leone are both on the agenda. Grab your lunch and join us here.
  • Our shiny new podcat brings you Pensions and politics geekery WITH NO BEER this week, in which Tom McPhail ruminates with Darren Philp, Head of Communication and Policy at Smart Pension, about HM Treasury, the pension dashboard and workplace pensions.
  • Sadly no lang cat karaoke at our Christmas Party this year, but for your music choice this week, here is a classic from years gone by. I’ll leave you to work out who was George, and who was Elton…