Date: 2nd August 2021

BETTER FINANCE welcomes the FCA's proposal on consumer duty. We consider the general duty of care to be at the core of investor protection in securities markets. In fact, in the BETTER FINANCE report on “Sustainable Value for Money”, BETTER FINANCE and the CFA Institute embarked on a project to analyse what industry and consumer stakeholders understand by sustainable value for money and how this can be achieved. It examined the results of a survey that took into consideration both consumers and professionals in capital markets and addressed, among others, the duty of care that could potentially be seen as similar to the Hippocratic oath, i.e. a commitment to always act in the best interests of the investors. Looking at BETTER FINANCE’s survey results, the majority of respondents (65%) consider that all financial advisers should have such duty of care (and the majority agree that it should be mandatory).

At the same time, we would like to recall the importance of the right to private redress which is a fundamental part of a consumer protection mechanism that needs to be attached to the definition of duty of care. The concern of BETTER FINANCE and its associate member – Transparency Task Force - is that the consultation fails to:

  • give rise to the right of private action by parties due to a breach
  • and to strictly connect the right to private action to the definition of duty of care.

Read the full response below.