Consumer Duty: Products and Services Outcome
Products and Services Outcome [PRIN 2A.2]
Rule: Firms must ensure that products and services are designed to meet the needs, characteristics, and objectives of customers in the identified target market.
Core Requirements
| Requirement | Description |
|---|---|
| Target market identification | Define specific group of customers for whom product is designed |
| Product testing | Test products before launch and throughout lifecycle |
| Distribution strategy | Ensure distribution appropriate for target market |
| Ongoing review | Monitor products meet target market needs over time |
Product Design Standards
For Manufacturers
- Identify target market with sufficient granularity
- Assess customer needs the product is designed to meet
- Test product delivers intended outcomes
- Identify customers for whom product is NOT suitable
- Select appropriate distribution channels
For Distributors
- Understand target market defined by manufacturer
- Obtain information needed for distribution
- Only distribute to identified target market
- Provide information back to manufacturer on customer outcomes
Foreseeable Harm
Firms must identify and mitigate foreseeable harm, including:
- Product features that could cause customer detriment
- Circumstances where product may not meet customer needs
- Vulnerable customer considerations
- Market or economic changes affecting suitability
Documentation Requirements
| Document | Purpose |
|---|---|
| Target market assessment | Record target market identification |
| Product approval process | Evidence of governance sign-off |
| Distribution strategy | How product reaches appropriate customers |
| Review records | Ongoing monitoring and any changes |