Consumer Duty Enforcement: Avoid a Costly Misstep in 2026

Consumer Duty enforcement has moved up a gear. Three years on from the introduction of the Consumer Duty, the FCA has made clear that the grace period is over. In its latest Enforcement Watch, the regulator sets out how it is moving beyond guidance and thematic reviews into more assertive supervision and enforcement, with 11 live investigations now examining potential Consumer Duty breaches.

Support for firms has not disappeared. The FCA continues to publish good practice and, so far, around 30 skilled person reviews have referenced the Duty. But the underlying message is hard to miss: firms must be able to demonstrate good consumer outcomes, not simply state that they are committed to them.

Where the FCA is focusing

For any firm the Consumer Duty applies to, the areas under scrutiny are clear: fair value, consumer understanding, consumer support, and whether firms are genuinely acting in their customers’ best interests. Importantly, this is not just about product pricing. Firms are expected to show that their products and services meet customer needs, deliver value, and do not create foreseeable harm.

A broader supervisory toolkit

The examples in Enforcement Watch show how wide the FCA’s toolkit has become. Recent interventions have included restricting firms from taking on new business, imposing voluntary requirements, commissioning independent reviews, and in some cases effectively prompting firms to leave the market.

For advisory and wealth management firms, the interventions worth noting relate to conflicts of interest, vulnerable customer support, fair value assessments and distribution oversight. In each case, the FCA is looking beyond policies and paperwork to whether firms can evidence positive customer outcomes in practice.

Supervision and enforcement are converging

Perhaps the most striking theme is how thin the line between supervision and enforcement has become. The FCA made 382 interventions in the last financial year, and several of its current investigations began as supervisory concerns that were not adequately addressed. The regulator is also more willing to publicise investigations where it believes doing so will protect consumers or send a deterrent message to the wider market.

In other words, Consumer Duty enforcement is no longer a distant risk reserved for the worst cases. Supervisory contact that is not handled well can escalate.

What Consumer Duty enforcement means for firms

If there was any hope that the Duty would settle quietly into the background as just another regulatory initiative, this publication puts it to rest. The FCA clearly intends to use the Duty as a central supervisory and enforcement tool, which means fair value assessments, vulnerable customer frameworks, management information, board reporting and customer outcome monitoring all need to stay high on the agenda.

The practical takeaway is to keep challenging whether your products, services, communications and support arrangements are genuinely delivering good outcomes, and to make sure you can evidence it. Being able to demonstrate good outcomes is now arguably as important as achieving them in the first place. If the FCA comes knocking, “we meant well” is unlikely to be a sufficient defence.

Preparing for tighter Consumer Duty enforcement does not mean reinventing your framework overnight. It is more about making sure the evidence is there and current: fair value assessments that are genuinely reviewed rather than simply filed, vulnerable customer support that works in practice rather than only on paper, and management information that demonstrates outcomes rather than just activity. Boards and senior management have a clear role here, since outcome monitoring and reporting are exactly the areas the FCA is scrutinising. Where a gap appears, it is far better to identify and address it internally than to have it surfaced during a supervisory visit.

You can read the FCA’s latest Enforcement Watch in full. If you would like help stress-testing your Consumer Duty evidence, from fair value to vulnerable customer support, speak to our team.