Consumer Duty and the introduction file
How the four Consumer Duty outcomes apply when a broking firm introduces clients to a financial planner, and what your file should show for each.
How the four Consumer Duty outcomes apply when a broking firm introduces clients to a financial planner, and what your file should show for each.
Consumer Duty has applied to products and services open to sale since 31 July 2023, and to closed products since 31 July 2024. It requires firms to act to deliver good outcomes for retail customers. Three cross-cutting rules sit beneath that: act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives.
The FCA sets out four outcomes: products and services, price and value, consumer understanding and consumer support. An introduction to a financial planner touches each of them, and your file is where you show how.
Your files show situations that can lead to harm if nothing is done.
You cannot advise on the pension or investment side of these. You can notice them, tell the client what you see, and offer a route to advice. Recording that you did is evidence that the firm acted on a harm it could foresee.
The products and services outcome asks that what a firm offers meets the needs of its target market. For an introduction, that means introducing clients whose situation points to a need for financial planning, at a point where advice can help them.
Record why each client was introduced, using the facts on their file. A record that shows a reason linked to the client's circumstances supports the outcome. A pattern of introductions with no reason recorded does not.
The fees for financial planning advice are set by Equity & General and are explained to the client before any advice is given. The client decides whether to proceed on that basis.
Where your firm receives a payment for an introduction or shares in ongoing value, check with your compliance lead how that is disclosed to the client, and record that the disclosure was made. Your firm's own fees for mortgage advice remain subject to the price and value outcome in the usual way.
The client needs to understand what an introduction is before they agree to it: who Equity & General is, that it is a separate regulated firm, what details are passed and what happens next. Use wording agreed in advance and tested on someone outside the firm.
Ask the client to say back what they have agreed to. Record the wording used. Where the client has characteristics of vulnerability that affect understanding, adapt: written summaries, more time, a family member present if the client wishes.
The client must be able to say no, change their mind and get help without obstacles. Tell them they can withdraw at any point, and how. If a client withdraws, tell Equity & General the same day and record it.
Keep supporting the client on their mortgage whatever they decide. A client who declines an introduction must receive the same service on their mortgage as one who accepts.
The Duty sits alongside data protection law. The client's details pass to Equity & General only with their agreement, and only the details needed for the planner to make contact. Your privacy notice needs to tell clients that you may share their details with a regulated financial planning firm with their agreement.
Health information and details of vulnerability are special category data. Pass them on only with the client's explicit consent, and only as much as the planner needs to adapt their service.
The Duty asks firms to monitor the outcomes their customers receive and to report on them to the board, or equivalent, at least once a year. Include introductions in that report.
Useful measures are the share of eligible cases where an introduction was offered, the share of clients who met a planner after agreeing, complaints connected with introductions, and any client who said they felt pressured. Where a measure points to a problem, record what you changed.
Share the results with Equity & General through your named contact. If clients you introduced report a poor experience with the planner, Equity & General needs to know, and your file should show that you told them.
An introduction made with recorded consent, for a reason linked to the client's circumstances, and with the client free to decline, supports good outcomes. The risk comes from pressure, unclear wording or a missing record.
Equity & General is responsible for the financial planning advice it gives. Your firm is responsible for its own conduct in making the introduction and for its mortgage and protection advice.
If your firm makes introductions, they are part of the service your customers receive and belong in the outcomes monitoring your firm reports on.
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