Products and Services Under the Consumer Duty: What Good Looks Like, and How Much Is Proportionate

In the space of a fortnight this summer the FCA published two things about the same subject that, at first glance, ask for opposite things. On 10 July 2026 it set out what good practice looks like on the Consumer Duty’s products and services outcome, based on a review of 38 firms, and the tone is one of depth. Two weeks earlier it had opened a consultation, CP26/23, on making the Duty more proportionate, and the tone there is one of restraint. So which is it: do more, or do less?

Read the two together and the answer is neither. The FCA is not asking every firm to monitor every customer, and it is not telling firms to stop monitoring. It is asking for the right amount of effort for the products you actually sell, aimed at the risks that matter, with a reason you can point to for where you drew the line. Proportionality is not a watered-down Duty. It is the Duty, sized to your firm and your customers. And the firms that came out well in July were the ones who could show why their approach was reasonable.

This guide walks through what the review found, what CP26/23 proposes, how the two fit together, and how Fenchurch One helps you land in the right place and prove it. It is a practitioner’s read, not legal advice; the references (PRIN 2A, FG22/5, CP26/23) are there so you can check the source.

1. What the July review looked at

The FCA reviewed 38 firms in October 2025, across banking, insurance, payments, asset management, investments, funeral plans and consumer finance, and published the findings on 10 July. It grouped them under four themes that sit inside the products and services outcome (PRIN 2A.3): how firms design products and define who they are for, how they monitor the outcomes customers receive, how they oversee distribution and the third parties in the chain, and how they treat vulnerable customers throughout. What follows takes each in turn: the good practice the FCA praised, the shortfall it flagged, and how Fenchurch One helps you close the gap.

2. Define who the product is for, and who it is not for

What the FCA found. A firm has to design a product that meets the needs of an identified target market, described in enough detail for the product’s risk. The best firms did this properly, tying specific customer needs to specific product features and, at their strongest, naming a negative target market: the customers a product is not right for. The weaker firms gave simplistic or generic descriptions, and did it most often on higher-risk products, without explaining how the risk justified the market they had picked.

How Fenchurch One helps. Fenchurch One’s Consumer Duty attestations record the target market, the customer-need fit and the fair-value judgement for each product, every answer mapped to the rules and carrying its own evidence field. Because the attestation is written against the FCA’s expectations, it prompts the detail the review found missing, so who a product is for, who it is not for, and why is captured on your board at the point you decide it, not reconstructed a year later when the FCA asks.

3. Watch the outcomes customers get, not just the complaints they make

What the FCA found. This was the sharpest part of the review. Firms have to monitor the outcomes customers actually receive, and the strongest examples went well beyond complaints, reading behavioural signals such as early cancellations and unusual usage so a poor outcome showed up before anyone complained. The common failing was the reverse: firms that tracked their metrics but never used them to trigger a review when something moved, and firms that leaned on complaint numbers alone, which only ever tell you about the customers annoyed enough to complain. Others made good changes and then never checked whether the changes had worked.

How Fenchurch One helps. Your dashboard builds itself from what your firm records, so overdue reviews, open registers and your latest position sit on one screen and the information is there to act on rather than buried. A Consumer Duty attestation captures the outcomes you monitor and the management information behind them, and the compliance calendar turns “look again when something is off” into a scheduled review with an owner and a date. The point the FCA keeps making is that information has to lead to action; a number nobody acts on is a gap, not a control.

4. Oversee your distribution, and check what you change

What the FCA found. A firm has to make sure its distribution suits the target market and take reasonable steps to see that products reach it. The stronger firms ran real distributor oversight: regular management information, complaints reporting and a route to put things right, plus root-cause work when a product was sold outside its market. The gaps were in justifying the choice of channel and in following through, because after a firm changed its distribution to fix a problem, it often never measured whether the change had helped.

How Fenchurch One helps. Every distributor you rely on — a broker, an introducer, an affiliate — gets its own board, so their due diligence, ongoing checks and annual review are recorded separately and nothing bleeds between firms; your reasonable steps are captured as you take them. Every distribution decision and the evidence behind it sits in Documents, and the compliance calendar schedules the periodic distributor reviews so they happen on a clock rather than after something goes wrong.

5. Vulnerable customers: spotting a need is not the same as meeting it

What the FCA found. The best examples were practical: accessibility adaptations, mapping the customer journey to find where harm could arise, and impact assessments that led to real changes. The recurring shortfall was quieter, and the FCA thinks it is common. Plenty of firms were good at identifying vulnerable customers but could not explain what they did once a need was identified. Spotting a need without a response is a process, not an outcome.

How Fenchurch One helps. Vulnerable-customer consideration runs through the Consumer Duty attestations rather than sitting on its own, so your record shows not just how you spot additional needs but what you do about them and how you know it helped. Closing that loop, need spotted, action taken, outcome checked, is exactly what the review found missing.

6. The other document: CP26/23 and proportionality

Put the review next to CP26/23 and the change in tone is plain. Published on 29 June 2026 and open until 18 September, with final rules expected in the first quarter of 2027, the consultation starts from the FCA’s own view that since 2023 the Duty has been applied “more widely, and more intensively, than intended,” especially in wholesale markets and complex distribution chains. Its aim is to take out unnecessary cost and complexity while keeping the protections retail customers depend on. Four proposals do most of the work: taking business with non-UK customers out of scope; making it clearer where the Duty applies and where it does not; letting firms in a chain rely on one another more sensibly and apply the Duty in proportion to their role; and explaining how the Duty fits with the existing product-governance rules.

For firms with straightforward businesses, the encouraging part is that the FCA is explicit about proportionality. It expects firms to focus on themes and trends at target-market level rather than track every individual customer, to rely reasonably on what others in the chain tell them rather than police everyone else, and to put the heavier scrutiny on complex, higher-risk and untested products. The review said much the same in its own words, noting that a smaller firm may “apply the Duty in a way that fits their size and customer base.” Proportionate is not the same as lax; it means matching the effort to the risk.

7. Full visibility, or proportionate effort? How the two fit

Here is the tension stated plainly. The July review admires firms with deep visibility of what happens to their products after they are sold. CP26/23 says, almost in so many words, that a firm need not gather granular customer-level data or police everyone else’s compliance. On their own, each can be read as arguing with the other, and it is fair to feel unsure which standard applies while the consultation is open.

Most of the tension goes away once you stop treating deeper monitoring and proportionate monitoring as opposites. Nothing in the review asks you to watch every customer; it asks you to notice poor outcomes and do something about them. Nothing in CP26/23 asks you to stop monitoring; it asks you to aim your effort where the risk is and to rely on the chain sensibly. Underneath both sits the same instruction: a sensible, evidenced judgement about how much is enough for these products and these customers. The firms that did well in July were not the ones that monitored the most. They were the ones that could show why they monitored what they did, and that is what makes a proportionate choice defensible whichever way CP26/23 lands.

8. How Fenchurch One helps you land in the right place, and prove it

All of this comes down to one thing a supervisor will ask: can you show, on the day, that your approach to a product was deliberate and reasonable? That is what Fenchurch One is built to give you.

Your Consumer Duty attestations hold the four outcomes on one board, each mapped to the rules, with the target market, fair value, consumer understanding, support and vulnerable-customer judgements recorded and evidenced as you go. The compliance calendar keeps the annual board assessment and the recurring reviews on a date, so nothing drifts past its deadline. When the review is due, the AI Compliance Report drafts the board narrative from your own records, and it only ever draws on what your firm has recorded, nothing invented, so the report your board signs reflects what the firm actually did. The FCA Dry Run puts a supervisor’s questions to your records before the supervisor does, and the downloadable proof pack gives an auditor or the regulator a dated, referenced export of the lot. When the FCA asks how you run products and services, the answer is a screen, not a scramble.

9. What to do now

Three practical steps. First, if your firm does business with non-UK customers, or sits early in a distribution chain, read CP26/23 and think about responding before it closes on 18 September; a consultation is the one moment you can shape the rules you will live under. Second, do not tear up your monitoring because of a consultation that is not yet the rules; the July review is what the FCA expects today, and the annual board assessment many firms approve on the 31 July cycle still has to be evidenced. Third, whatever the size of your firm, write down the reasoning behind your proportionality choices now, so that if a supervisor questions them, or the final rules move the line, you can show the judgement was considered rather than convenient.

That is the whole idea behind Fenchurch One: record each obligation as you go, keep the evidence with it, and reasoned compliance stops being a scramble and becomes a screen you can hand across the table. That is the difference between having your controls and being able to prove them.