Bite-size: Consumer Duty board reports – FCA’s view of good and poor practice
On 24 February 2025, the FCA published feedback on good and poor practice in Consumer Duty board reports, following its review of around 180 firms’ first annual reports. The review is intended to shape firms’ next reporting cycle and underlines the FCA’s expectation that boards can evidence meaningful oversight of outcomes, not just implementation activity.
The FCA highlights that the best reports are structured around the core requirements in PRIN 2A.8, draw on monitoring under PRIN 2A.9 and allow boards to test whether the firm’s strategy and governance are aligned to delivering good customer outcomes. Strong reports use clear, outcomes‑focused MI (quantitative and qualitative), define what ‘good outcomes’ look like for key products and target markets, and show how issues identified have led to concrete remedial action and measurable improvements.
The FCA also points to better practice where firms specifically analyse outcomes for vulnerable customers and other distinct customer groups and where smaller firms use proportionate but targeted MI and governance to demonstrate control.
By contrast, weaker reports are often generic, heavily compliance‑led and light on board challenge with limited evidence that the business owns Consumer Duty risks. Common failings include vague assertions that products meet needs, limited or unbalanced MI, little or no analysis of vulnerable customers, and action plans that lack clear ownership, timescales or follow‑up on effectiveness. The FCA is also critical where firms do not adequately address third‑party and distribution‑chain risks or where closed‑book and outsourcing arrangements receive minimal attention despite their potential impact on outcomes.
Key takeaway:
For the next cycle, firms should reset their Consumer Duty board reports to focus on three things: clear definitions of good outcomes and robust MI to test them, visible board ownership and challenge (including on vulnerability and third‑party risks) and specific, trackable actions that demonstrably improve outcomes and align strategy with PRIN 2A. Firms that cannot evidence this in their reports should expect closer supervisory scrutiny of both governance and Consumer Duty implementation.
