What is consumer duty?
The Financial Conduct Authority (FCA) introduced Consumer Duty with the intention of creating a higher standard of consumer protection in retail markets and to reduce the level of harm to retail consumers.
The Consumer Duty comprises three related elements:
1. A Consumer Principle
A broad statement of the standards of behaviour expected from firms: “A firm must act to deliver good outcomes for retail clients”
2. Cross-cutting Rules
A development of the Consumer Principle across the various areas of firm conduct. Rules that would require firms to take reasonable steps:
- to act in good faith;
- to avoid foreseeable harm to customers; and
- to enable customers to pursue their financial objectives
The FCA expects firms to comply with these cross-cutting rules/behaviours across all of the firm’s activities, from high-level strategic planning to individual customer interactions.
3. Four Consumer Outcomes
Further detailed expectations for the firm-consumer relationship.
A set of rules and guidance that will determine firms’ conduct in relation to
- Products and services: are designed to meet the needs, characteristics and objectives of a specified target market
- Price and value: Products and services provide fair value with a reasonable relationship between the price consumers pay and the benefit they receive
- Consumer understanding: Firms communicate in way that supports consumer understanding and equips consumers to make effective, timely and properly informed decisions
- Consumer support: Firms provide support that meets consumers’ needs throughout the life of the product or service
The Consumer Duty is a significant shift in the FCA’s expectations of firms. It introduces a more outcomes-focused approach to consumer protection and sets higher expectations for the standard of care that firms give customers.
Our approach
Culture & Strategy
Jupiter has always recognised the importance of putting clients first, as demonstrated by the firm’s cultural pillars. As such Jupiter are ensuring that there is a thorough understanding of Consumer Duty and its outcomes. We continue to make sure that all staff are aware of the need to act in a way that demonstrates an understanding, and adherence to, the Consumer Principle and Cross Cutting rules by providing awareness and training on our broader Conduct Risk Framework including Consumer Duty.
Through the Consumer Duty Implementation, Jupiter has enhanced its existing robust Governance Framework to ensure that there is effective oversite of Consumer Duty by the relevant Boards and Committees. These boards and committees will have responsibility for reviewing and challenging Consumer Duty metrics, which have been designed to demonstrate that Jupiter is providing good outcomes for retail clients as well as ensuring there are processes in place to support its vulnerable clients.
Consumer Duty Champions have been appointed on both the Jupiter Unit Trust Management Board Limited (JUTM) and Jupiter Asset Management Limited (JAM) Board. The Champions help to ensure that wider board discussions are focused on the needs of consumers and challenge the firm’s governing bodies and management on how they are embedding the Duty in Jupiter’s culture and operations.
Consumer Support & Understanding
We have reviewed all the methods we use to communicate with our clients and the ones they have available to communicate with us. We will continue to conduct such reviews on an annual basis. Our reviews take the four outcomes into consideration to ensure that we continue to provide the best client experience.
- We review of the letters that we send clients, to ensure that they are easy to understand and contain all of the information that we need to provide in a clear way.
- We look at all of our literature to ensure that it is clear and easy to use.
- We look at our processes and procedures to make sure that they are straightforward and provide the best client outcomes.
- We review our online “My Account” function to ensure that it is accessible and meets our clients’ needs in a simple and straightforward way.
- We work closely with our administrators, SS&C, to ensure that we provide our clients with the help and information they need, when they need it, in the way that best suits them.
All of our client facing collateral is put through a rigorous approval process to ensure it is clear, fair and not misleading. Our investment marketing team have been trained on consumer duty requirements and current collateral has been reviewed to ensure that it is easy to understand.
We have engaged with Research in Finance, an independent market research specialist, to gather client feedback on the quality of the communications we produce. After the feedback has been gathered and assessed, we implement any changes across our collateral to ensure that they remain retail-friendly.
We have also created an online feedback form on our retail website to monitor our clients’ satisfaction when using the website. Clients’ feedback left in the online form is frequently reviewed and any feedback implemented. There are also regular meetings between our Marketing and TA oversight teams to look into clients’ inquiries and determine how to address their needs – from enhancing functionality on the website, to improving online user experience.
We are working on an initiative to proactively trace dormant assets and repatriate them with the beneficial owner.
Vulnerability
All Jupiter employees undertake training on Consumer Duty to provide them with further understanding of the duty, and on how it impacts them in their roles. This training is designed to make employees aware of how they can contribute to ensuring good outcomes for clients as well as specific considerations where necessary for vulnerable clients.
Over the past few years, we have completed a comprehensive review of our processes and procedures, using the FCA’s four key drivers of poor health, negative life event, low financial resilience and low capability, to ensure that we have considered how our clients may need different or additional information or support. Changes have been made however this is an ongoing, evolving process with updates being made regularly to our processes, how we communicate with you and how you can communicate with us. We are always looking at ways that we can improve the customer journey and provide the appropriate support to our clients to ensure that they achieve the best outcome.
Key information for distributors
We have completed a review of our obligations in relation to the Price and Value and Product and Services outcomes. Where relevant, we have enhanced our process and governance procedures in line with Consumer Duty Requirements. Relevant documents can be found at the links below:
Our EMT has been updated to version 4.2. The template contains 10 fields relating to the Consumer Duty price and value outcome. As well as being available on our website, it has been distributed to our standard recipient list. If you would like to be added to the mailing list please contact consumerduty@jupiteram.com who will arrange this.
In addition to the information provided within the EMT, we have created a supplementary report to address the Consumer Duty outcomes not covered within the EMT, namely Product & Services, Consumer Support and Consumer Understanding, to provide distributors with the information they require to discharge their obligation under the duty. The report can be accessed below.
| Consumer duty EMT supplement H2 2024 |
As part of our obligations as a manufacturer under the Consumer Duty we have recently contacted distributors to request quantitative data updated on a regular basis in line with industry standards. This data will include sales data by distribution strategy and positive/neutral/negative target market and will enable us to better understand how our products are sold to different groups of clients across various distribution channels.
Under the duty it is the responsibility of distributors to notify Jupiter of specific events which can serve as early indications of potential issues and negative outcomes to clients. Please contact consumerduty@jupiteram.com as and when any of the below instances are identified:
- Distribution issues – harms arising from distribution arrangements and any changes made as a result.
- Complaints – complaints made about any Jupiter product or service received.
- Poor outcomes – a product ceasing to provide fair value either in general or for a specific group of clients.
- Vulnerability characteristics – anything that Jupiter can improve to ensure customers with vulnerability characteristics receive outcomes consistent with other customers.
