FCA’s recent comments on STAR, Consumer Duty and the importance of Full MI
16 February 2023
The Financial Conduct Authority (FCA) recently wrote a series of Dear CEO letters to the Consumer Investment sector, outlining their expectations of firms regarding the new Consumer Duty rules.
The Consumer Duty rules are an entirely new set of conduct rules aimed at protecting retail consumers. These rule changes have already been described as the most significant regulatory and cultural shift over recent years and focus on producing good outcomes for consumers – something that has been neglected when it comes to transfers.
The STAR transfers initiative can help companies evidence their support of new Consumer Duty rules. Participating STAR firms who put themselves forward for accreditation can showcase that they are focused on achieving timely transfers and good consumer outcomes.
STAR is a new award scheme, to tackle the issue of the amount of time it takes to transfer savings, investments, and pensions from one company to another. Transfers involve platforms, insurers, fund managers, re-registration and transfer intermediaries, custodians, third-party administrators and trustees. It also falls across multiple regulatory jurisdictions, with the FCA, Pensions Regulator and Department of Work and Pensions, all having an interest in different elements of the system. The STAR initiative was introduced as an alternative to regulation or legislation, to enable the industry to voluntarily get its house in order. For this reason, two independent and not-for-profit organisations (Criterion and TeX), joined forces to manage the improvements for the industry.
The STAR initiative awarded its first accreditations in November 2022, which is measured and accredited transfer performance across the industry. The awards are designed to both reward good performance and encourage improved performance.
The FCA has made specific references to STAR and transfers in its recent CEO letters, stating:
Criterion and TeX strongly encourage all pension, savings and investment providers to join STAR – the biggest cross-industry collaboration in decades.
For further information please contact:
Commercial and Marketing Director
0773 765 0010
STAR was created as a collaboration between Criterion and TeX, combining the industry-reach, unique strengths, experience and shared ambition of the two not-for-profit organisations.
Criterion was formed for the industry in July 2017, as an independent, not-for-profit industry body providing Standards and Governance services. It was originally part of Origo Services Ltd and has been publishing process and integration standards for over 25 years. Criterion is uniquely positioned to facilitate and drive cross-industry engagement, helping organisations achieve higher levels of collaboration, reduce costs and achieve better outcomes for their consumers.
TeX is a not-for-profit organisation which works with the industry to ensure that the maximum benefit is provided to all members. This new company is financially independent from TISA but benefits from being linked to the TISA brand through name, the expertise provided by the two corporate entity directorships and the administrative support provided by TISA.