The FCA’s Consumer Duty is now business as usual, applying to both open and closed products across the financial services – including protection, pensions savings & investment sectors. For providers, this landmark, principle-based regulation represents a significant shift in expectations – moving away from point-in-time compliance towards ongoing responsibility for customer outcomes.
Phase One, introduced in July 2023, applied to open products. From July 2024, the Duty extended to closed products, so providers must now demonstrate that all customers — past and present — receive fair value and clear communications. With this milestone passed, the focus in 2025 is no longer prep – it is execution, evidence, and continuous improvement.
What Consumer Duty Means for Providers in 2025
1. Legacy products under the microscope
Closed books of business can no longer be left untouched. Providers have a duty to review and monitor legacy policies to ensure they continue to deliver good outcomes. This may involve examining historic charging structures, outdated terms, or communication practices that no longer meet FCA standards, communicated through Consumer Duty.
- For protection providers, this could mean revisiting long-standing policies to ensure claims processes are clear and equitable.
- For pensions and savings providers, legacy charging models may need adjustment to demonstrate fair value.
2. Enhanced data and evidence requirements
The FCA has made it clear: good intentions are not enough. Providers must be able to produce robust management information (MI) to prove they are delivering positive outcomes.
This includes data on:
- Product value assessments
- Customer engagement and understanding
- Complaints and redress trends
- Vulnerability monitoring
For providers, the challenge is not just collecting this data but also using it proactively to improve products and services.
3. Distribution oversight and accountability
Providers are now expected to take greater responsibility for their distribution chains. This means ensuring that advisers, platforms, and intermediaries are marketing and selling products in line with Consumer Duty principles.
Failure to identify poor practices downstream could expose providers to regulatory action. On the flip side, strong oversight can strengthen adviser relationships and enhance market reputation.
Why Consumer Duty Compliance Creates Opportunity
While the Consumer Duty raises the bar, it also offers providers the chance to differentiate themselves through transparency and customer focus.
- Trust as a competitive advantage: Providers who can demonstrate fairness and clarity may gain a reputational edge.
- Operational efficiency: Digital solutions and straight-through processing reduce manual effort while creating the audit trails the FCA expects.
- Customer retention and growth: Meeting the Duty is not only about avoiding penalties – it’s about improving customer satisfaction, which drives loyalty and long-term profitability.
Practical Steps Providers Should Take Now
- Audit closed books thoroughly – Identify potential risks in legacy policies and take corrective action before the FCA flags them.
- Invest in data infrastructure – Move away from fragmented reporting systems and towards unified, real-time MI.
- Strengthen distribution oversight – Build governance frameworks that monitor how products are sold and communicated across all channels.
- Embed consumer duty into governance – Make customer outcomes a standing agenda item at board and product committee meetings.
- Leverage technology – Use digital platforms to track, evidence, and improve customer journeys end-to-end.
The iPipeline Perspective
At iPipeline, we see providers leading the way when they harness digital infrastructure to embed Consumer Duty into day-to-day operations. Straight-through processing, automated value assessments, and enhanced MI are not only helping providers meet FCA expectations – they are also driving faster applications, reduced drop-outs, and stronger customer trust.
As Consumer Duty becomes business-as-usual in 2025, providers who act early and embrace technology will find themselves ahead of the regulatory curve and better positioned for growth.
Get in touch with our team to discover how iPipeline solutions can help you operationalise Consumer Duty today.
