Consumer Duty in 2026: Consumer Duty continues to shape how mortgage firms design, monitor and explain their services.
In 2026, the regulatory discussion has developed. The FCA is considering how the Duty can remain effective and proportionate while providing greater clarity around its scope.
For mortgage advisers and Connect appointed representatives, the practical standard remains unchanged. Technology can support advice, but the firm must still understand the outcome it produces.
Automation may process information. It cannot take responsibility for the recommendation.
At a Glance
Consumer Duty in 2026 remains focused on good client outcomes.
Current areas of attention include proportionality, distribution chains, product governance, consumer understanding and the use of technology.
Connect ARs should know where automated tools are used, check their outputs and maintain clear human oversight.
Proposed FCA changes should not be treated as final rules until the consultation and policy process has concluded.
Consumer Duty Is Still an Outcomes-Based Standard
Consumer Duty requires firms to act to deliver good outcomes for retail clients.
It is built around three cross-cutting obligations:
- Act in good faith
- Avoid causing foreseeable harm
- Enable and support clients to pursue their financial objectives
These obligations are supported by four outcomes:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
The structure gives firms room to design suitable processes.
It also requires them to explain why those processes are effective.
Proportionality Does Not Mean Lower Standards
The FCA has continued to consider how Consumer Duty can be applied proportionately.
In June 2026, it published a consultation concerning the Duty’s scope and proportionality.
A consultation contains proposals. It does not automatically change the current rules.
Advisers should continue to follow existing requirements unless confirmed changes take effect.
Proportionality concerns how the standard is applied. Relevant factors may include:
- The adviser’s role
- The nature of the service
- The complexity of the product
- The client group
- The risk of harm
- The firm’s influence over the outcome
- The information reasonably available
A low-risk process may require simpler monitoring than a complex service.
It does not require no monitoring.
The FCA’s Consumer Duty scope and proportionality consultation provides the current consultation detail.
Consumer Duty Across the Distribution Chain
A mortgage client’s outcome can be influenced by several firms.
These may include:
- The lender
- The mortgage network
- The appointed representative
- The adviser
- A product provider
- A technology supplier
- A lead generator
- A packager or distributor
Each firm’s responsibility depends on its role and influence.
An adviser may not design a lender’s product. However, the adviser can influence which product is recommended and how it is explained.
A network may not hold the client conversation. However, it can influence advice standards, monitoring, training and controls.
The existence of another firm in the chain does not remove the need to understand your own responsibilities.
Artificial Intelligence in Mortgage Advice
AI can support parts of the mortgage advice process.
Possible uses include:
- Summarising case notes
- Checking documents
- Drafting client communications
- Identifying missing information
- Comparing policy wording
- Supporting lender research
- Classifying enquiries
- Reviewing management information
These uses can improve consistency and reduce administration.
They can also create risk.
AI-generated content may be incomplete, outdated or presented with more confidence than the evidence supports.
Advisers should not assume that an output is correct because it appears professional.
Questions to Ask Before Using AI
Before using an AI-supported process, the firm should understand:
- What task the system performs
- Which data it uses
- Whether personal data is entered
- How outputs are checked
- Who approves the final decision
- How errors are reported
- Whether the system creates bias
- How records are retained
- Whether clients need relevant information
- What happens when the system is unavailable
The system should support professional judgement.
It should not conceal how a decision was reached.
Human Oversight Must Be Meaningful
Human oversight means more than clicking an approval button.
The reviewer should have enough knowledge and information to challenge the output.
For mortgage advisers, this may involve checking:
- Client facts
- Affordability information
- Product eligibility
- Lender criteria
- Fees and charges
- Risk warnings
- Suitability reasoning
- Client communication
- Regulatory status
The person reviewing the output remains responsible for the work they approve.
An adviser should be able to explain the recommendation without relying on the software to explain it for them.
Google, Online Content and Consumer Understanding
Consumer Duty also affects how firms present information online.
Clients may first encounter an adviser through Google, an AI answer or an adviser directory.
The information they find should not create a misleading expectation.
Online content should clearly explain:
- Who provides the service
- Whether advice is regulated
- Which services are available
- Any significant limitations
- Whether fees may apply
- How the client can make contact
- Where risk warnings are required
Search visibility should not be achieved by making unsupported claims.
A page that attracts the wrong client can create confusion before the advice journey begins.
Accuracy, structure and clear entity information help both consumers and search systems understand the service.
Adviser Profiles as Part of the Client Journey
Connect Experts provides a directory for Connect appointed representatives.
A complete profile can help a prospective client compare advisers before making contact.
Profiles may include:
- Adviser name
- Business name
- Location
- Languages spoken
- Areas of mortgage expertise
- Appointment methods
- Regulatory information
- Contact details
Connect ARs should review their directory information regularly.
Clients can use the UK mortgage adviser directory to search by location, language and mortgage need.
An accurate profile supports informed choice. An outdated profile may direct a client towards a service that is no longer available.
Product Governance for Mortgage Advisers
Mortgage advisers are usually distributors rather than product manufacturers.
However, distributors still need to understand the intended market for the products they recommend.
This may require considering:
- The lender’s target market
- Clients for whom the product may be unsuitable
- Product features and limitations
- Fees and early repayment charges
- Expected client needs
- Distribution restrictions
- Information supplied by the manufacturer
- Outcomes observed among clients
Repeated problems should be reported through the appropriate network or lender channel.
Product governance is not limited to product design. Distribution evidence can show how a product performs in the real market.
How Connect Supports ARs in 2026
Connect Network can support appointed representatives through a combined framework of compliance, training, technology and specialist guidance.
This may include:
- Regulatory updates
- File review feedback
- Advice process guidance
- Technology controls
- Training and professional development
- Consumer Duty monitoring
- Complex case support
- Lender and provider information
Explore compliance and regulatory support for mortgage advisers.
The purpose is to make responsibility clearer.
Technology, systems and network guidance should help the adviser make a better decision. They should not replace the need to make one.
What Connect ARs Should Take From 2026
The key lesson for 2026 is that Consumer Duty must remain effective as advice becomes more digital.
Advisers should:
- Understand the systems used in their business
- Check automated outputs
- Protect client information
- Challenge inaccurate results
- Record the final reasoning
- Maintain current online profiles
- Report recurring product or process problems
- Follow confirmed rules rather than assumptions about consultations
A modern advice process may use AI, automation and digital communication.
The professional obligation remains human.
The client outcome matters more than the speed of the system that produced it.
Frequently Asked Questions
Has Consumer Duty changed in 2026?
The FCA has consulted on targeted changes concerning scope and proportionality. Proposed changes should not be treated as final until the regulatory process is complete.
Can mortgage advisers use AI?
AI may support administration, research and communication. Firms must still control its use, check outputs and protect client information.
Is the adviser responsible for an AI-generated recommendation?
The adviser and firm remain responsible for the advice and regulated activities they provide.
What is meaningful human oversight?
It means a suitably skilled person reviews, understands and can challenge an automated output before relying on it.
Why do adviser directory profiles matter under Consumer Duty?
Accurate profiles help consumers understand the adviser’s services, expertise and contact options before entering the advice journey.