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Consumer Duty

Introduction and Purpose
Amersham Investment Management Ltd ("AIML") is required to be compliant with the FCA's Consumer Duty ("The Duty") which sets a high and clear standard of consumer protection and requires firms to act to deliver good outcomes for customers.

The Duty consists of a package of measures which include an overarching standard of conduct, a set of cross-cutting rules which provide clarity on behaviour and four outcomes that set clear expectations for the firm's cultures and values. These measures form part of a new Consumer Principle which aims to ensure that not only are good outcomes delivered, but that firms understand and evidence the outcomes.
The terms 'consumer' and 'customer' mean retail clients who are within the scope of this policy, including those the firm does not deal with directly.

The Consumer Duty ("The Duty") applies to AIML in relation to its regulated activities in connection with products and services offered to retail consumers. This includes where the firm does not have a direct relationship with the end consumer but can have a material influence over, or determine, consumer outcomes. It will apply to AIML in respect of the following activities:

  • the design or operation of retail products or services, including their price and value;
  • the distribution of retail products or services;
  • preparing and approving communications that are to be issued to retail customers; or
  • engaging in customer support for retail customers.
The Duty will apply to closed products or when AIML has purchased a product book.

AIML must comply with the Duty which comprises of the following 3 elements.

Consumer Principle
FCA Principle 12 states "a firm must act to deliver good outcomes for retail customers". Principle 12 will replace Principles 6 (Customers' Interests) and 7 (Communications with Clients) where this policy applies. Principles 6 and 7 will continue to apply to businesses out of the scope of this policy.

Cross-cutting rules
This cross-cutting rules require AIML to:

  • Act in good faith towards consumers. This is a standard of conduct characterised by honesty, fair and open dealing, and consistency with the reasonable expectations of customers.
  • Avoid causing foreseeable harm to consumers through its actions and omissions which can occur not only when the firm is in a direct relationship with a customer but also through its role in the distribution chain even where their actions or omissions are not the sole cause of harm.
  • Enable and support retail customers to pursue their financial objectives in relation to the financial product or service and applies throughout the customer journey and life cycle of the product or service.
AIML must adhere at all times to the cross-cutting rules in order to demonstrate the required behaviour to meet its obligations under above principle 12 and implement the four outcomes (see below).

Four Outcomes
The following outcomes apply to AIML when conducting in scope business and represent the key elements of the firm's consumer relationship, focusing on how AIML designs, sells and manages products and services, and the key contact points along the customer journey.

  • Products and services - When manufacturing or distributing products or services AIML must:
    • ensure that the design of the product or service meets the needs, characteristics and objectives of customers in the identified target market;
    • ensure that the intended distribution strategy for the product or service is appropriate for the target market;
    • carry out regular reviews to ensure that the product or service continues to meet the needs, characteristics and objectives of the target market.
    Specific requirements under the Duty depend on whether AIML is manufacturing or distributing a product or service.
    AIML is a 'manufacturer' if it creates, develops, designs, issues, manages, operates, or carries out a product or service.
    When acting as manufacturer AIML must:
    • Approve existing products or services, any significant adaptation to a product or service, or any new product or service it introduces;
    • Identify a target market of customers for whom a product or service is designed;
    • Consider the needs of customers with characteristics of vulnerability in the target market;
    • Ensure its products or services, including existing products and services, are designed to meet the target market's needs, characteristics and objectives;
    • Develop a distribution strategy appropriate for the target market.
    • Agree information gathering and sharing with distributors in order to assess whether the four outcomes are being met;
    • Have a written agreement in place when co-manufacturing to outline respective roles and responsibilities.
    AIML is a 'distributor' if it offers, sells, recommends, advises on, arranges, deals, proposes, or provides a product or service, including at renewal.
    When acting as distributor AIML must:
    • Have distribution arrangements for each product or service it distributes;
    • Understand the products or services it distributes;
    • Identify or create a distribution strategy;
    • Upon request, provide relevant information to manufacturers;
    • Conduct a formal approval process for new products and services and operate a review process at least annually or sooner if there are significant adaptions.
    AIML must take action if it identifies failures in the products and services outcome which could include not launching new products or services, ceasing of marketing and distribution or making changes in order to continue to market or distribute.
  • Price and value - When acting as a manufacturer or distributor of products or services AIML must ensure that the price of products and services represent fair value for consumers. A fair value assessment should take place at the point of approving of a new product
    or service for marketing or distribution, and at least annually thereafter unless significant adaptions require an interim review. Where AIML identifies that a product or service no longer provides fair value, it must take appropriate action, which may include amending it to improve its value or withdrawing it from sale.
  • Consumer understanding - AIML must ensure that its communications equip consumers to make effective, timely and properly informed decisions about financial products and services. AIML will give consumers information they need, at the right time and presented in a way they understand. Where necessary AIML shall tailor its communications to reflect characteristics of the customers intended to receive the communication - including any characteristics of vulnerability.
    Where appropriate AIML will test communications to ensure it is meeting these requirements.
  • Consumer support - AIML must provide support that meets its customers' needs. The support firms provide should enable consumers to realise the benefits of the products and services they buy, pursue their financial objectives and ensure that they can act in their own interests.

Procedure AIML will implement the following procedures to ensure that the requirements of the consumer duty are met.

AIML's Board will be responsible for ensuring that good outcomes for consumers are central to the firm's culture, strategy, and business objectives.
All FCA Senior Managers hold a Duty of Responsibility to ensure that AIML complies with the requirements of the Duty.
John Forsyth has been appointed to ensure that the Duty is raised regularly in all relevant discussions and challenging Senior Managers on how the Duty is being embedded in the business.
AIML's Board will ensure the Remuneration Policy does not conflict with its obligations under the Duty.
AIML's Board will ensure all conduct rules staff are trained on the requirement to act to deliver good outcomes for consumers.
AIML's Board will review an annual report on how the firm is delivering good outcomes for consumers and any action required as part of monitoring.
The annual report will include:

  • the results of the monitoring that the firm has undertaken to assess whether products and services are delivering expected outcomes including any evidence of poor outcomes where relevant, and an evaluation of the impact and the root cause;
  • an overview of the actions taken to address any risks or issues;
  • a summary of how the firm's future business strategy is consistent with acting to deliver good outcomes under the Duty;
  • the action required to address any identified risks, or any action required to address poor outcomes experienced by customers and agree whether any changes to the firm's future business strategy are required.
The assessment will be backed up by management information.

Data and Monitoring
AIML's Board will consider regular Management Information to identify whether there are any risks that the firm is not meeting the cross-cutting obligations and the outcomes and consequently not acting to deliver good outcomes for consumers. Where poor outcomes are identified the Board will ensure appropriate action, including where necessary redress or other action (see Redress and Other Action Policy), is taken to rectify the causes of the poor outcomes and the firm continuously learns from its focus and awareness of the outcomes that consumers experience in practice.

Product and Service Approval and Review
To satisfy approval and periodic review AIML's Board will review and approve a Product Approval and Review Checklist that will cover detailed product and service outcome requirements depending on whether the firm is acting as a manufacturer, co-manufacturer, or distributor.
This approval and review form will also document the price and value assessment.

AIML's Financial Promotions and Communications Policy contains the policy and procedures in place to ensure that the firm's communications equip consumers to make effective, timely and properly informed decisions about financial products and services. This will include a financial promotion review and approval process and where necessary and financial recipients register form to detail a detailed customer journey for high-risk products.

Consumer Support
AIML ensures that it provides sufficient support to allow retail customers to solve problems in a timely manner. This will include:

  • adequately resourced after-sales function enabling prompt response to enquiries from competent staff;
  • ability to identify and deal with vulnerable consumers;
  • phone systems, menus or web chat facilities that are easy to navigate;
  • clear website that make it easy to find online information for support;
  • monitoring of any third parties engaged to provide support.
AIML ensures that the process to switch, cancel or complain about a product and service is easy for retail customers. AIML will continually monitor the quality of the support we provide and will act promptly to address areas where we fall short of the outcome.

Record keeping
AIML will keep records to evidence compliance with monitoring obligations against PRIN 12, cross cutting rules and outcomes.

FCA notifications
AIML will notify the FCA under PRIN 11 of anything the regulator must be made aware of including whether other firms in the distribution chain are not or may not be complying with PRIN 12, cross cutting rules or outcomes.