Consumer Duty Governance, Outcome MI and SM&CR Assurance

Outcome evidence under Principle 12 and PRIN 2A

Under FCA Principle 12 and PRIN 2A, compliance is no longer a policy that says the firm acts to deliver good outcomes. For an SMF holder, a non-executive director, or the board of a pension operator, a wealth manager or an Appointed Representative network, the question is whether the management information shows the outcome the customer actually received.

A count of cases closed, trades placed, or training modules completed does not answer that question. The record has to show whether the fee was matched by a review, how long a drawdown instruction sat out of the market, whether a statutory notice went out in time, and whether a fixed administration charge is consuming a small pot.

The notes linked below are the detailed tests. This page is how they fit a Consumer Duty governance framework: outcome management information, operational friction, and the board report.

Three streams

Who the record is written for

Boards and non-executive directors

PRIN 2A.8 requires the governing body to review outcome monitoring at least annually and to approve the report. A director who signs that report on activity statistics has not reviewed the outcomes.

SMF16, SMF1 and SMF3

The duty of responsibility asks what reasonable steps the senior manager took. A dashboard that cannot be tied to a customer cohort is a weak answer.

Network principals

An Appointed Representative book can keep deducting ongoing charges after the annual review has stopped. SYSC does not let the principal treat that as the AR’s private problem.

Platforms, SIPP operators and discretionary managers

The harm is often in the middle office: a dealing queue, a payroll batch, a fixed trustee fee on a pot the target market no longer fits, or a model-portfolio charge stack the client cannot see.

From activity statistics to outcome metrics

A book can show 98% of tasks inside the service standard and still be taking ongoing fees from clients who have had no review. That is the green-dashboard problem. The annual report is only as good as the segmentation underneath it.

Pensions decumulation and operational friction

PRIN 2A.2 and PRIN 2A.6 are where a middle-office delay becomes a conduct issue. In accumulation, a slow trade is friction. In drawdown, the same delay can leave a retiree out of the market, or waiting on a payroll batch, while the operations report says the trade was placed on time.

Drawdown lag

A “95% of trades within 48 hours” figure stops at the dealing desk. The client is measuring the days from the instruction to money in the bank: validation, execution, fund settlement, the payroll run, then the payment. An all-or-nothing lock, which holds liquid proceeds until the slowest asset settles, is a design choice. It is also a foreseeable out-of-market period.

The full note is Decumulation Telemetry: Tracking SIPP Drawdown Lag as Foreseeable Harm.

The 31-day flexible-access statement

The Money Purchase Annual Allowance is triggered when taxable income is paid, not when the form is signed and not when units are sold. Regulation 14BA of the Registered Pension Schemes (Provision of Information) Regulations 2006 (SI 2006/567) gives the scheme administrator 31 days from that payment to issue the flexible-access statement. A PDF left in a portal, with no alert, does not tell the member that a 91-day duty to notify other schemes has started, or that a failure to notify can bring an HMRC penalty under section 98 of the Taxes Management Act 1970.

The full note is The 31-Day MPAA Trap: Monitoring Statutory Trigger Disclosures in Flexi-Access Drawdown.

Fixed fees on a small pot

A flat trustee charge that is immaterial on a £250,000 SIPP can be several % of a residual pot after drawdown, a pension-sharing order, or a partial transfer. PRIN 2A.4 looks at the cohort, not the average fee across the whole book. An average that is “0.23% of assets” can hide a band of small pots whose administration charge is consuming the return.

The full note is Fixed-Fee Erosion in Low-Value SIPP Pots: When Administration Fees Breach Fair Value.

Distribution chains, networks and the board pack

The same test applies where the draft file does not yet have a separate note.

A discretionary model portfolio is not fairly priced because the factsheet matches the model. PRIN 2A.4 asks for the stack: adviser retainer, discretionary fee, platform custody, and the fund’s own charges and transaction costs. A centralised investment proposition is not on-target because the model rebalanced. The question is whether the client’s tested capacity for loss still sits inside the target market under PROD.

For a network principal, second-line monitoring has to see review delivery by Appointed Representative, not a network average. Where the client does not respond to the annual review, the file needs a recorded escalation and a point at which the fee stops. Repeated wet-signature demands and manual delays on a transfer out are exit friction under PRIN 2A.6, not a thorough process.

Complaint files are the raw material for that monitoring. A falling count is not a root cause. The method for turning casework into board information is Turning FOS Casework into Consumer Duty Root-Cause MI.

Before a non-executive signs the annual assessment, the pack should show the segmented figures above, the tolerance that turns a measure amber or red, and what changed in the control after the last red. A narrative that restates the policy does not do that.

When the framework is tested

• The annual board assessment. The evidence pack under PRIN 2A.8, not a restatement of the Consumer Duty policy.
• A change of reporting. Risk-committee papers that still lead with volumes, SLAs and training completion.
• A migration, an acquisition, or a new centralised proposition. New books are where unserviced cohorts, fee drag and transfer friction appear.
• A data request. Ongoing-service rates, distribution-chain pricing, or what actually happened on accounts flagged as vulnerable.

How the information is built

Summary

Principle 12 and the Senior Managers and Certification Regime are judged on outcomes that can be checked, not on a dashboard that stays green. The tests above are how ongoing fees, drawdown delays, statutory notices, small-pot charges and complaint patterns are read before a supervisor, a Skilled Person or the Ombudsman reads them first.

Where the need is an outcome-MI review, support for the annual assessment, or a look at drawdown and servicing journeys, the place to start is the contact page.