YEAR TWO – TIME TO REFINE YOUR BOARD REPORT

It’s that time again. We’re busy finalising Consumer Duty board reports, but this year is a little different.

We’ve all had 12 months to reflect on what went well (or not!) last year and the FCA has now released its review of more than 100 board reports from large firms. This has made the regulator’s expectations much clearer and highlighted where many are still falling short.

So, it seems like the time is right to take stock and look at how you can improve this year’s offering.

Common pitfalls

In its June update, the FCA identified certain issues that stopped firms meeting the standard expected. They include:

• Reports that are too generic or superficial and lack detailed insight into customer outcomes
• Weak or absent data, making it hard to judge how well the duty is being met
• No evidence of board engagement or challenge, suggesting a tick-box exercise
• Reports that focus on process, rather than demonstrating the firm’s impact on consumers
• Failure to identify root causes or monitor whether corrective actions are effective.

It went on to highlight several key areas it felt characterised strong board reports. They included:

Outcome focused insight

Reports should go beyond listing actions. They must explain how you have improved customer outcomes and be backed up with supporting data. Start by identifying key metrics that reflect the four Consumer Duty outcomes. For example, customer satisfaction scores, complaint resolution times or product suitability rates.

Next, you need to analyse these metrics and draw meaningful conclusions. Look for trends, patterns and anomalies that tell a story about your clients’ experiences. You can then use this analysis to demonstrate a link between the firm’s actions and improved customer outcomes.

Use of MI and customer data

Good reports include metrics and highlight any areas of concern using root cause analysis. Management Information (MI) is the backbone of any board report and finding ways to strengthen it ensures you are capturing the most relevant and insightful data to inform your decision-making.

If you identify any gaps in your MI, consider implementing new metrics or data collection methods. These might include customer surveys, more detailed transaction analysis or enhanced monitoring. Finally, make sure the data is presented in a clear format so complex information is more digestible for your board members.

Board challenge

Strong reports evidence meaningful discussion and scrutiny at board level – how much will depend on the size of your business. Clearly, sole advisers won’t need to do the same as a 30-adviser firm!

Effective board engagement demonstrates you are striving for improvement, so ensure your report is clear and accessible. Include a section that highlights areas of concern, prompting a deeper dive into the issues. Document the debates that occur to show the FCA your board is actively overseeing Consumer Duty compliance.

Tailored content

Reports should be specific to your firm’s business model, products and customer types, especially if you have vulnerable clients.

Start by identifying your firm’s specific characteristics, then align your reporting metrics and insights to them. For example, if you serve a significant number of vulnerable clients, include specific data on how you are meeting their needs.

Finally, ensure your report addresses the unique challenges and opportunities within your business model. Taking a tailored approach will make the report more valuable to both your board and the FCA.

Clear ownership and forward planning

Good reports include next steps, deadlines and clearly assigned responsibilities. Setting measurable actions for improvement demonstrates your commitment to ongoing compliance and better customer outcomes.

For each area you think you can improve, set specific goals. For example, writing “reduce complaint resolution time by 25% in the next six months” is much more effective than something vague, such as “improve complaint handling.”

Specify who is going to be responsible for implementation and monitoring progress. Accountability will ensure the improvements are actioned effectively.

Benchmark your report

If you are in the process of finalising your second board report, now is the time to:

• Revisit your MI – can it really demonstrate outcomes?
• Involve the board meaningfully – can you show evidence of challenge and debate?
• Address any data gaps – are you tracking what matters?
• Build in customer feedback and vulnerability insights
• Set clear and measurable actions for improvement.

Remember, the goal is to show not just what you’re doing, but why it matters and how it’s improving outcomes for your clients. If you want make sure you are meeting these guidelines, take a look at our Consumer Duty toolkit, which outlines best practise and will help ensure your report meets FCA expectations.

We are currently working with many clients to review, write and challenge board reports, to ensure they will stand up to FCA scrutiny. This year’s deadline is approaching quickly, so if you would like assistance with your Consumer Duty board report, don’t hesitate to contact us on (0161) 521 8641 or email: info@b-compliant.co.uk