Consumer Duty for Small FCA Firms: Outcomes and Cross-Cutting Rules

The FCA's Consumer Duty is the biggest shift in conduct regulation since the Senior Managers and Certification Regime. It sets a higher standard for how firms treat retail customers, and it applies to nearly every FCA-regulated firm that deals with consumers — including the smallest. For a five-person adviser or intermediary, the Duty is not a large-firm concern to be delegated; it is a live, ongoing obligation that supervisors increasingly focus on.

This guide explains the Consumer Duty in plain English for small firms: the Consumer Principle it introduced, the three cross-cutting rules, the four outcomes, and — importantly — how the Duty connects to the individual conduct rules your staff already have to follow.

What is the Consumer Duty?

The Consumer Duty is a package of rules and guidance, set out in the FCA Handbook at PRIN 2A, that requires firms to focus on delivering good outcomes for retail customers. It came into force in stages:

31 July 2023 — for new and existing (open) products and services.
31 July 2024 — for closed products and services (those no longer marketed or open to new customers).

The Duty does not apply retrospectively to firms' past actions, but from those dates onward it governs how firms design products, price them, communicate, and support their customers.

The Consumer Principle (Principle 12)

At the top of the Duty sits a new Principle for Businesses. The FCA's finalised guidance FG22/5 states it plainly: "The Consumer Principle, Principle 12, requires firms to 'act to deliver good outcomes for retail customers'."

Principle 12 sets a higher and more exacting standard than the previous "treating customers fairly" principle. It is not enough to avoid harming customers or to follow the letter of the rules — a firm must actively work toward good outcomes.

The three cross-cutting rules

Beneath the Consumer Principle sit three cross-cutting rules that explain how firms should act to deliver good outcomes across everything they do. Per the FCA's finalised guidance, firms must:

"act in good faith towards retail customers"
"avoid causing foreseeable harm to retail customers"
"enable and support retail customers to pursue their financial objectives"

These apply to all areas of a firm's conduct, not just to specific products. For a small firm, they translate into practical questions: Are we being straight with our clients? Could anything in how we operate foreseeably harm them? Are we actually helping them achieve their financial goals, or just selling to them?

The four outcomes

Below the cross-cutting rules, the Duty sets out four outcomes — the specific areas where firms must deliver good results for customers. These are:

Products and services — products and services must be designed to meet the needs of an identified target market and be sold to that market.
Price and value — customers must receive fair value, meaning a reasonable relationship between the price paid and the benefit received.
Consumer understanding — communications must support customers' understanding, equipping them to make effective, timely and properly informed decisions.
Consumer support — support must meet customers' needs, so they can use their products as expected and act in their own interest without unreasonable barriers.

For a small advisory firm, these outcomes shape day-to-day practice: the price-and-value outcome affects how you assess and disclose your charges; the consumer-understanding outcome affects your client communications and disclosures; the consumer-support outcome affects how easy it is for a client to get help or make a change.

The Consumer Duty and your conduct rules

This is the point most directly relevant to firms already living with SMCR — and it is where the Consumer Duty and the conduct rules meet. The Duty is not only a firm-level obligation; it is reinforced at the individual level through the conduct rules.

The FCA added an individual conduct rule requiring staff to act to deliver good outcomes for retail customers. This means that for firms and staff subject to the Duty, the expectation to deliver good customer outcomes is not just a corporate policy — it is a personal conduct standard that applies to individuals in the same way the other conduct rules do. If you want the detail on how the individual conduct rules work, our guide to the FCA COCON individual conduct rules covers the full set, and the COCON conduct rules guide explains how they bind everyone in the firm.

This link matters for two reasons. First, it means Consumer Duty breaches can become individual conduct rule breaches — with the reporting and record-keeping consequences that carries. Second, it ties the Duty into the same accountability structure the FCA is strengthening with the PS25/23 non-financial misconduct rules taking effect on 1 September 2026: the person responsible for Consumer Duty outcomes at the firm is a named Senior Manager, and staff behaviour toward customers is a conduct-rules matter.

What small firms actually need to do

The Duty is proportionate — the FCA does not expect a small firm to build the apparatus of a large one. But every firm in scope needs to be able to show:

A named Senior Manager responsible for the firm's Consumer Duty outcomes (this is often the SMF16 Compliance Oversight holder or the SMF1/SMF3).
Ongoing monitoring of whether the firm is delivering good outcomes across the four areas — this feeds naturally into the firm's compliance monitoring plan. See our compliance monitoring plan guide for how to structure that.
A fair value assessment for the products and services the firm provides or distributes.
An annual board report (or equivalent for a small firm) assessing whether the firm is delivering good outcomes and identifying any action needed.

The annual Consumer Duty report is a recurring obligation — it is not a one-off implementation exercise. Firms are expected to review, evidence, and act on outcomes on an ongoing basis.

Common mistakes

1. Treating the Duty as a large-firm problem. Small firms are in scope. A supervisor will expect a proportionate but genuine Consumer Duty framework.

2. Doing the implementation once and stopping. The Duty requires ongoing monitoring and an annual outcomes report. A firm that "implemented" the Duty in 2023 and never revisited it has a gap.

3. Missing the individual conduct rule link. Consumer Duty failings can be individual conduct rule breaches — they do not sit only at firm level.

4. No fair value assessment. The price-and-value outcome requires firms to assess and be able to evidence that customers receive fair value.

Summary

The Consumer Duty (PRIN 2A) came into force on 31 July 2023 (open products) and 31 July 2024 (closed products).
It is anchored by Principle 12 — firms must "act to deliver good outcomes for retail customers".
Three cross-cutting rules: act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives.
Four outcomes: products and services, price and value, consumer understanding, consumer support.
The Duty is reinforced through an individual conduct rule, tying it into the SMCR accountability structure — which the FCA tightened on 1 September 2026.

Last reviewed: 3 September 2026. This guide explains the FCA Consumer Duty for small regulated firms. It is general information, not regulatory or legal advice, and it does not describe a ConductLog product feature — ConductLog is validating demand for a tool that helps small FCA-regulated firms handle conduct and misconduct processes. For your firm's specific obligations, check the FCA Handbook and consider professional advice.