“Many firms are on course to meeting it [the Consumer Duty implementation deadline], according to our own research.”

— Sheldon Mills, FCA, 10 May 2023

The FCA’s price and value outcome is now fully in force. Firms must be able to demonstrate that their products and services offer fair value—not just at launch, but on an ongoing basis. This article outlines the regulator’s expectations for firms, examples of good and poor practice, and a practical self-assessment to support internal review.

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Why Fair Value Matters Under the Consumer Duty

Under the Consumer Duty, fair value means that the price a customer pays is reasonable compared to the benefits they receive—including product features, quality, limitations, and non-financial costs. A value assessment must go beyond high-level assertions or benchmarking to evidence-based analysis.

The FCA’s Approach to Fair Value Reviews

In its 2023 review of 14 firms’ fair value frameworks, the FCA noted that while most firms were on track, some relied on “unevidenced arguments” or assumed their model inherently delivered fair value. This falls short of expectations.

Customised Value Assessments and Differential Outcomes

Fair value assessments must consider whether:

  • Customers in different groups or channels experience differential outcomes
  • Margins are disproportionately high for certain customers
  • Vulnerable consumers are treated fairly
  • Cross-subsidisation impacts perceived fairness
  • Non-financial costs (e.g. time, decision friction) have been factored in

Does Your Firm’s Assessment Reflect Actual Outcomes?

Firms should avoid relying on averages and instead assess outcomes at a granular level. The FCA expects firms to test whether their services are genuinely delivering fair value, even where price alone appears competitive.

Evidence and Governance in Fair Value Assessments

Can you show that your pricing structure is transparent, and that benefits are proportionate to the cost? Key considerations include:

  • Broker commissions and complex charges
  • Use of behavioural nudges or sludge practices
  • Clear presentation of limitations or exclusions
  • Use of customer feedback and complaints data

Value Across the Distribution Chain

If your firm operates as a manufacturer, co-manufacturer, or distributor, you must understand the fair value responsibilities attached to each role. Where you rely on third parties, you must gather appropriate input or pass on relevant information.

Ongoing Monitoring and Review Triggers

Firms must monitor outcomes and reassess value when prompted by:

  • Shifts in product use or pricing
  • New customer segments
  • Complaints or conduct risks
  • Emerging data trends

Fair value is not static. Firms need triggers, thresholds, and governance structures in place to ensure products continue to meet the Duty.

Board Oversight and Accountability

Boards are expected to:

  • Review value assessments regularly
  • Challenge assumptions and high margins
  • Approve fair value frameworks
  • Sign off on remedial action where products or services fall short

Support and Resources for Firms

C&G Regulatory Solutions supports firms with:

  • Consumer duty fair value assessments
  • Differential outcomes analysis
  • Internal governance and MI design
  • End-to-end support for compliance with Consumer Duty requirements

Looking for independent advice on consumer duty fair value compliance?

We bring practical experience and regulatory insight to help your firm meet its obligations.

Contact us to discuss how we can support your fair value assessment framework.