Dear CEO Letter 1st March 2024 – Assessments of Value and Consumer Duty

We at ISC noted with interest the contents of the Dear CEO letter issued by the FCA on 1st March 2024. It recognised that 2023 was a difficult year for the industry in raising/maintaining assets, and that many firms had to indulge in cost-cutting and consolidation, whilst at the same time having to cope with new opportunities and increased regulation. Firm’s resources have therefore already been thinly stretched, and 2024 is likely to see a continuation of this.

One of the specific topics covered was that of Assessments of Value and Consumer Duty. The FCA noted that whilst some firms have adopted good practices in their AoV’s, others still have some way to go, and therefore where there are weaknesses, firms are not able to meet their underlying consumer duty obligations around fair value satisfactorily. The FCA makes it clear that firms are expected to follow the FCA’s rules and guidelines in completing their AoV’s and “necessary action” will be taken where this is deemed not to be the case.

In their letter the FCA states: -

“This year, we will build on this work and will assess, under the Consumer Duty, how asset managers have considered price and value of products and services provided to unit-linked funds. We will undertake a joint multi-firm review with the life insurance portfolio, to understand price and value across the value chain and what actions firms have taken under the Duty to improve outcomes”.

The direction of travel is clear.. the scope of value assessment is broadening and regulatory pressure is increasing on asset managers to make sure that appropriate governance, with clear metrics to measure value, are implemented

AVIATe: Assessment of Value Intelligent Automation Technology

Streamlined Assessment of Value
ISC Ltd and FundSense developed AVIATe, the first automated solution to the challenge of compiling annual Value Assessments for UK Retail Funds

AVIATe is an intelligent automation solution that supports a “best practice”, operationally efficient approach to Assessment of Value (AoV) that improves governance and reduces risk.

Contact us and request a demo
If you would like to find out more about how AVIATe can streamline your Assessment of Value and to request a demo, talk to Michael Hilton [email protected]