Consumer Duty 2026: 5 Things Firms Still Get Wrong., e.g., The FCA’s Consumer Duty Champion was retired in February 2026
The Consumer Duty has been in force for three years for open products and two for closed ones. In that time the rules have moved, the guidance has moved, and the FCA’s supervisory posture has moved a long way indeed. What has not moved, in a great many firms, is the compliance framework built in the summer of 2023 — or the consultancy web page describing it.
We reviewed a sample of UK compliance consultancy websites this month. Several of them, updated within the last eight weeks, still tell firms to appoint a role the FCA retired eighteen months ago. If your adviser’s website is out of date, ask yourself what else is.
Here are the five points where the gap between what firms believe and what the FCA actually requires is currently widest. Three of them are settled. Two are live proposals, and we have flagged which is which, because the distinction matters more than the detail.
1. The Consumer Duty Champion is not required — and has not been since February 2025
This is the most common error, and it is not a subtle one.
FG22/5 said the FCA expected firms to have a champion at board or equivalent governing body level, supporting the chair and chief executive in raising the Duty in relevant discussions and challenging management on how the Duty was being embedded. Thousands of firms appointed one, usually a non-executive director, and wrote the role into their governance maps.
On 27 February 2025, the FCA withdrew that expectation. Its reasoning was that the Duty was now in full effect and no longer needed a designated person to drive it into management discussions. Firms may keep the role if they find it useful. They are not required to have one.
Two things follow. First, if your governance map still shows a mandatory Champion, it is describing a requirement that does not exist — and an inspector reading it will reasonably ask when you last reviewed your framework. Second, and more importantly, removing the champion did not remove the accountability. The board remains collectively responsible for outcomes. What changed was the prescription, not the expectation. Firms that treated the Champion as the whole of their Duty governance now have a visible hole where a person used to be.
The FCA is proposing, in CP26/23, to strip the remaining Board Champion references out of FG22/5 — which tells you that the guidance itself has been carrying the outdated wording for a year and a half. If a consultancy is quoting FG22/5 back at you without knowing which parts of it the regulator has already disowned, that is a competence signal.
2. There is no requirement for a standalone board report — and there is a proposal to say so explicitly
PRIN 2A.8.3 requires a firm to prepare a report for its governing body setting out the results of its monitoring of consumer outcomes and the actions required as a result. The board must review it, approve the outcomes and any remedial action, and satisfy itself that customers are receiving good outcomes.
What PRIN 2A.8.3 does not say is that this must be a separate, standalone, hundred-page document with “Consumer Duty Annual Board Report” on the cover. A great many firms assumed it did, and the FCA has heard the complaint: board-level reporting has become process-driven, and board packs have filled with duplicated material.
Status: proposal. In CP26/23 the FCA proposes to clarify that the extent of a firm’s reporting should be proportionate to its role and activities in the distribution chain, and that a firm need not produce a standalone Consumer Duty board report where the information is already covered elsewhere in its board reporting. Reporting must still happen at least annually.
The practical point for 2026 is not to stop producing the report. It is to stop producing a document that duplicates your MI pack. The FCA’s own thematic review of the first annual reports — updated on 24 February 2026 with additional insight for smaller firms — is unambiguous that what it is looking for is evidence of board challenge, not volume. Most reports we review fail on the same thing: the board approved it, and nobody wrote down what the board asked.
3. The Duty’s territorial reach is narrowing
Status: proposal. CP26/23 proposes to limit the Consumer Duty to retail market business where the retail customer is usually resident in the UK, with limited exceptions where the business has a clear UK connection.
For firms with overseas retail books, this is potentially the single largest cost line in the consultation. Many have been applying full Duty machinery — target market assessments, fair value assessments, outcome monitoring — to customers the FCA never intended to protect, because the safe reading in 2023 was to apply it to everyone.
Nothing changes yet. The proposals are proposals, much of the package sits in non-Handbook guidance rather than rules, and the Duty applies today exactly as it did before. But the direction of travel is set, and firms scoping their 2027 compliance monitoring programme now should be scoping two versions.
4. “Co-manufacturer” is being replaced, and you are responsible for your own role — not the whole chain
Status: proposal. The current framing catches a firm in the distribution chain wherever it can determine or materially influence the design, target market or performance of a retail product, even with no direct relationship with the retail customer. That is why so many wholesale firms built full Consumer Duty frameworks they never expected to need.
CP26/23 proposes to restructure this: replacing the co-manufacturing concept with a principal and secondary manufacturer model, clarifying which activities are in and out of scope, and confirming that a firm is responsible for its own role in the chain rather than for the chain as a whole.
If your firm sits mid-chain, this is the chapter to read. And if your firm has a manufacturer agreement drafted on the co-manufacturing model, it will need revisiting once final rules land in Q1 2027.
5. The Duty stopped being an implementation project some time ago
The 31 July 2023 and 31 July 2024 dates did their job and then stopped mattering. What replaced them is continuous, data-led supervision — and, increasingly, enforcement. The FCA disclosed in January 2026 that it had six potential Consumer Duty breaches under investigation, weighted towards fair value.
The firms getting into difficulty are rarely the ones that failed to build a framework. They are the ones that built a good framework in 2023, filed it, and have been re-running the same monitoring ever since without asking whether it still measures anything. Outcome monitoring that has produced a green rating every quarter for eleven quarters is not evidence that outcomes are good. It is evidence that the metrics are not sensitive enough to detect a problem.
The dates that matter between now and Q1 2027
| Date | What happens |
|---|---|
| 27 February 2025 | Consumer Duty Board Champion expectation removed (already in force) |
| 24 February 2026 | FCA updates its board report good and poor practice guidance, with added insight for smaller firms |
| 29 June 2026 | CP26/23 published — scope and proportionality proposals |
| 18 September 2026 | CP26/23 consultation closes — last date to respond |
| Q1 2027 | FCA expects to publish the policy statement and make final rules |
How to tell whether your compliance framework — or your adviser — is current
Four questions. They take five minutes and they are diagnostic.
- Does your governance map still describe the Consumer Duty Champion as a requirement? If yes, your framework has not been reviewed since February 2025.
- Can you point to written evidence of board challenge on your last Consumer Duty report — not just approval of it? If not, you have the FCA’s most-cited weakness.
- Do you know whether CP26/23 narrows or widens your scope? If your firm sits in a distribution chain, or serves retail customers outside the UK, the answer is worth money.
- Has your adviser told you about any of the above, unprompted? Regulatory currency is not a nice-to-have in this market. It is the whole service.
Where we can help
Compliance Consultant provides independent Consumer Duty assurance for FCA-regulated firms: framework gap analysis against the current position rather than the 2023 one, fair value assessment review, board report assurance ahead of your next reporting cycle, and outcome monitoring design that actually detects a problem. We also help firms draft consultation responses to CP26/23 before it closes on 18 September 2026.
If your framework has not been looked at since it was built, a short discovery call will establish whether it needs a refresh or a rebuild. There is no charge and no obligation, and we will tell you if we think you do not need us.
Book a discovery call: https://bit.ly/CCDiscovr Or answer the preliminary questions in your own time: https://bit.ly/FCADiscovery-Support
Compliance Consultant | https://complianceconsultant.org | UK 0800 689 0190 | Int’l 020 8243 8620 | Discovery call: https://bit.ly/CCDiscovr
Sources
- FCA, Consumer Duty — information for firms (Board Champion expectation removed from 27 February 2025): https://www.fca.org.uk/firms/consumer-duty
- FCA, CP26/23: Consumer Duty — scope and proportionality, published 29 June 2026, closes 18 September 2026: https://www.fca.org.uk/publications/consultation-papers/cp26-23-consumer-duty-scope-and-proportionality
- FCA, Consumer Duty board reports: good practice and areas for improvement (updated 24 February 2026): https://www.fca.org.uk/publications/good-and-poor-practice/consumer-duty-board-reports-good-practice-areas-improvement
- FCA Handbook, PRIN 2A.8.3 — governing body report requirement
- FCA, FG22/5 — Final non-Handbook Guidance for firms on the Consumer Duty
