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Consumer Duty one year on

News

STAR’s role in the FCA’s Consumer Duty

STAR continues to grow but FCA states that it is going to investigate those not participating. 


It’s been over one year since the Financial Conduct Authority’s (FCA) Consumer Duty rules were introduced to the industry. These rules were created to encourage fairer practices and better outcomes for consumers, and in turn, help the economy to prosper.

The transfer of savings, pensions and investments has been a longstanding issue for advisers and their clients, often fraught with complexities and delays. As digital technology advances, people increasingly expect financial transactions to happen quickly and seamlessly. However, individuals attempting to move their funds between different financial institutions or investment platforms often encounter bureaucratic hurdles, unclear processes, and extended transfer times that fall short of these expectations.

These delays not only cause frustration but can also lead to financial losses, as advisers and consumers miss out on timely market opportunities or face difficulties accessing their funds. The growing demand for faster, more transparent, and reliable transfer processes reflects the modern expectation for efficiency and immediacy in all financial dealings.

The FCA’s expectation on Consumer Duty and STAR

The FCA recognise that the effective transfer of funds for consumers is fundamental to providing good outcomes, and has outlined its expectations that firms engage with STAR to provide evidence that they are making progress towards this:

  • Firms are expected to engage with STAR and support the principles and actions endorsed by the FCA in connection with the STAR initiative.
  • Firms reporting poor transfer times compared to peers, and not already engaged with STAR, will face inquiries about their reasons for non-engagement. The FCA is prepared to act if progress on transfer times is lacking.

"As a vehicle to standardise and demonstrate reasonable industry transfer times, we expect firms to engage with, (if not already) and continue to, support the principles and FCA Public actions endorsed by STAR initiative. Where firms are reporting poor transfer times in comparison with peers and do not already engage with STAR, we will be enquiring about their justification for non-engagement and will act in the absence of progress on transfer times."

FCA

The FCA has been explicit in its mandate that financial firms must participate in the STAR initiative and   is integral to ensuring that consumers experience fair treatment and timely service.

In 2024, STAR received 61 MI submissions and awarded 53 accreditations. However, despite the growth of STAR and clear directive from the FCA, many firms continue to fall short in adopting STAR. This failure not only undermines consumer trust but also risks regulatory repercussions, as firms struggle to align their practices with the FCA’s heightened expectations for good consumer outcomes and standards.

How does STAR work?

STAR has four categories for awards: ISA/GIA, personal pensions SIPP and SSAS, occupational pensions and asset managers. For each SLA group, firms report management information (MI) and are accredited annually based on this data. The process is simple and just by taking part, your organisation can demonstrate to the FCA its dedication to improving transfer times for consumers.

If you would like to learn more about STAR, then please get in contact with us at enquiries@joinstar.co.uk.

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© 2024 CT Holdings and Services Limited (CTHS), a joint venture between TISA Exchange Limited and Criterion Tec Limited.

All rights reserved. Company number: 11700872.

SERVICING AGREEMENT

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1. APPLICANT COVERED BY THIS REGISTRATION.
Please note this registration will not be processed if Step 1 has not been completed.
If your organisation is acting only as an affiliate, you do not need to complete Step 2.
2a. CHOOSE YOUR BRAND
STAR manages the administration of third-party access to the portal, rather than the member firm. This allows for a smoother transition for the member firm and allowing immediate access to the supplier to submit MI on their behalf. STAR will hold an approved list of users per supplier, which will be allocated to your account at the point of registration. This ensures each ‘external’ user has the same access across all their client accounts. Supplier access is restricted and they do not have any ability to see any company information for any client other than what they submit on your behalf. You as the member control access for any other users within your organisation. We will include a more detailed description about the user access on your welcome email and it is clearly defined as part of the User Guide.
STAR RELATIONSHIP MANAGER FOR FIRST BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2b.
STAR RELATIONSHIP MANAGER FOR THE SECOND BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2c.
STAR RELATIONSHIP MANAGER FOR THE THIRD BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2d.
STAR RELATIONSHIP MANAGER FOR THE FOURTH BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
3. INVOICE INFORMATION
Invoices are sent by email as standard, if a printed invoice is required please note the address and your requirements in the additional information section.
4. DECLARATION
Before we can process your Brand Registration a STAR Servicing Agreement needs to be signed. Your signatory must be duly authorised for and on behalf of the organisation named in this application.
We only require one signed STAR Servicing Agreement which will cover all brands that you wish to register. Upon completion of this form we will check our records to ensure an agreement hasn't already been signed, if so a new contract will not be sent to your signatory.
STAR will email the servicing contract to the signatory email address (provided below) through our electronic platform Yoti. This declaration must be signed in order for your application to complete, once we receive the signed agreement we will instruct our finance department to issue your invoice.

Application submitted successfully

Thank you for applying to join the STAR accreditation scheme. We will endeavour to respond as soon as possible using the contact information you’ve provided to us.