Consumer Duty in 2024 entered a new phase
The first deadline had passed. Open products and services were already within scope. Firms now needed to show that their processes were producing good outcomes in practice.
The next major deadline was 31 July 2024. From that date, Consumer Duty also applied to closed products and services.
For mortgage advisers and Connect appointed representatives, the central task changed. Consumer Duty could no longer sit inside an implementation plan. It needed to be visible within client files, management information and business decisions.
At a Glance
During 2024, Consumer Duty moved from initial implementation towards measurable evidence.
Mortgage advisers needed to review client outcomes, identify recurring weaknesses and record the action taken. Firms also had to consider closed products from 31 July 2024.
For Connect ARs, strong evidence included clear suitability records, client communication checks, support for vulnerable clients and meaningful management information.
What Changed in 2024?
Consumer Duty came into force for open products and services on 31 July 2023.
A second deadline followed on 31 July 2024. This brought closed products and services within its scope.
A closed product is generally one that was sold before 31 July 2023 but was no longer being marketed or sold to new customers.
Although an adviser may not manufacture these products, clients can still hold them. They may return for a review, ask about an existing mortgage or need support during financial difficulty.
Advisers therefore needed to recognise when an older arrangement could affect the current advice journey.
The FCA’s Consumer Duty publications and resources provide the primary regulatory guidance.
Consumer Duty Was Not a Completed Project
The first implementation deadline did not mark the end of the work.
Firms were expected to monitor whether clients were receiving good outcomes across four areas:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
For mortgage advisers, this required more than completing a compliant fact-find.
A firm also needed to consider whether its advice process worked as intended. This meant reviewing patterns across files rather than viewing every case in isolation.
What Evidence Should Mortgage Advisers Keep?
A strong advice file should explain the complete reasoning behind a recommendation.
Useful evidence may include:
- The client’s needs and objectives
- Relevant income and expenditure details
- The client’s knowledge and experience
- Alternatives that were considered
- The reasons unsuitable options were discounted
- Fees and charges explained to the client
- Material risks discussed
- Evidence that the client understood the recommendation
- Any vulnerability or support needs
- Agreed follow-up actions
The amount of evidence should reflect the complexity of the case.
A straightforward product transfer may require a different level of explanation from a debt consolidation mortgage or complex buy-to-let application.
Proportionality does not mean reducing the quality of the record. It means matching the evidence to the decision.
Closed Products and Existing Mortgage Clients
Closed products created practical questions for advisers.
A client may hold an older mortgage with features that are no longer widely available. They may also face early repayment charges, limited support options or restricted access to product information.
The adviser should avoid assuming that a newer product is automatically better.
The review should consider:
- The cost of leaving the existing arrangement
- Any benefits that would be lost
- Current and future monthly payments
- The client’s remaining mortgage term
- Changes in income or circumstances
- Available support from the existing lender
- The client’s longer-term objectives
The aim is not to replace every older product. It is to establish whether the current arrangement still produces an acceptable outcome.
The First Consumer Duty Board Report
By 31 July 2024, firms subject to the relevant governance requirements were expected to have completed their first annual Consumer Duty board report.
The report needed to assess whether the firm was delivering good outcomes.
It also needed to identify:
- Evidence used to assess outcomes
- Areas where outcomes were below expectations
- Actions required to address weaknesses
- Risks that could affect future outcomes
- Whether the firm’s strategy remained consistent with Consumer Duty
Connect ARs contribute to this wider assessment through the quality of their files, complaints records, client feedback and business data.
An adviser may not write the network’s report. However, their daily decisions help create the evidence behind it.
What Management Information Can Show
Management information should help a firm reach a decision.
Simply counting completed mortgages is not enough.
Useful measures may include:
- File review results
- Common remedial actions
- Complaint causes
- Mortgage application fall-through rates
- Delays in responding to clients
- Fee variations
- Product replacement patterns
- Vulnerability records
- Client communication failures
- Cases requiring repeated intervention
The figures should be considered together.
For example, a rise in complaints may indicate a communication issue. Repeated file review findings may show that further training is needed.
Data has little value unless it leads to a question, decision or improvement.
Support for Connect Appointed Representatives
A network provides a structure within which advisers can apply Consumer Duty consistently.
Connect ARs can access support covering compliance, training, file quality and specialist case placement.
This may help advisers:
- Interpret regulatory expectations
- Strengthen suitability records
- identify gaps before submission
- Discuss complex client circumstances
- Improve communication standards
- Record fair value considerations
- Complete relevant professional development
Read more about compliance support for mortgage advisers.
Consumer Understanding in Practice
A signed document does not always prove understanding.
Advisers should consider how information was presented and whether the client could act on it.
This may involve:
- Using plain language
- Explaining technical terms
- Separating essential information from supporting detail
- Checking understanding during the conversation
- Giving clients time to consider the recommendation
- Providing information in a suitable format
Consumer understanding is not measured by how much information the adviser sends.
It is measured by whether the information helps the client make an informed decision.
Clients seeking mortgage advice can also use the Connect Experts mortgage adviser directory to compare advisers by location, expertise and language.
What Connect ARs Should Take From 2024
The main lesson from 2024 was that Consumer Duty needed evidence.
Good intentions were not enough. Processes, records and monitoring needed to show how the firm delivered good outcomes.
For advisers, this meant:
- Recording the reasoning behind recommendations
- Checking that clients understood key information
- Identifying foreseeable risks
- Reporting recurring problems
- Learning from file reviews and complaints
- Supporting the network’s outcome monitoring
Consumer Duty became part of normal business practice during 2024.
The strongest evidence was not a new policy. It was a clear record of better decisions.
Frequently Asked Questions
When did Consumer Duty apply to closed products?
Consumer Duty applied to closed products and services from 31 July 2024.
What is a closed product?
It is generally a product sold before 31 July 2023 that is no longer marketed or distributed to new customers.
Does an adviser need to consider an existing closed mortgage?
Yes, where it is relevant to the client’s current circumstances or recommendation.
What should Consumer Duty management information show?
It should help the firm assess outcomes, identify weaknesses and decide what action is required.
How can Connect support its appointed representatives?
Connect can provide compliance guidance, training, file review support and help with complex cases.