UK Consumer Duty: Measuring, evidencing, and achieving fair value in pricing

The FCA’s Consumer Duty, which came into force on July 31st, mandates firms to assess whether their products deliver ‘fair value’ to customers. But how do you measure the relationship between the price a consumer pays for a product and the benefit they receive from it? More importantly: how do you ensure (and demonstrate) this relationship is ‘reasonable’?

A strategic compass to drive better growth

In our view, it is critical that UK financial firms first adopt a strategic mindset when conducting their fair value assessments under the Consumer Duty. This is not another ‘regulation tick box’ exercise. Ultimately, companies that embrace the question of ‘fair value’ will build the foundation for financial sustainability as well as customer trust and engagement.

Indeed, history has demonstrated that when firms lose sight of fair value they are likely to destroy shareholder value whilst alienating their customers. Just think of…