The Four Outcomes are the specific domains through which the FCA’s Consumer Duty (PS22/9, in force July 2023) assesses whether firms are delivering good outcomes for retail customers. They sit alongside the Cross-cutting Rules, the three overarching standards of good faith, no foreseeable harm, and enabling customers to pursue financial objectives.
The four areas
1. Products and services. Firms must design, manufacture and distribute products and services that meet the needs, characteristics and objectives of an identifiable group of retail customers. Products must not be designed or sold to customers for whom they are unsuitable, and the target market must be defined and kept under review.
2. Price and value. Firms must ensure the price customers pay is fair value relative to the benefits they receive. Value assessment must consider the full range of costs and benefits across the product’s lifetime, and not only the headline price. Firms must be able to demonstrate they have carried out and acted on value assessments.
3. Consumer understanding. Firms must produce and distribute communications that support informed decision-making by retail customers. Information must be clear, fair and not misleading, and must be tailored to the needs and characteristics of the target customers, including vulnerable customers who may need communications adapted to their circumstances.
4. Consumer support. Firms must provide support that enables customers to realise the benefits of the products they hold and get the help they need when they need it. Customer service must not be a barrier to exercising rights or making changes, and firms must actively monitor whether customers are experiencing poor outcomes through their support interactions.
Monitoring and evidencing outcomes
A key element of Consumer Duty is the requirement on firms to monitor outcomes and act on the evidence. Firms must define what a good outcome looks like for each of the Four Outcomes in their specific context, collect data to track whether they are achieving it, and take action (including product changes, distribution changes or communication redesign) where they are not.
For training teams, this creates an ongoing obligation to keep Consumer Duty training current as the firm’s products and distribution evolve. See our guides to Consumer Duty training requirements and training your whole firm on Consumer Duty.