# Applying Consumer Duty and fair-treatment tests
A UK asset manager builds a slick landing pagelanding pageA standalone web page built for a single campaign goal, designed to maximise conversions by removing distractions and focusing visitors on one action.View full definition → for its new retail multi-asset fund. The headline: "Steady growth, built for your future." Legal signs off. Then the compliance team asks one question: "Steady for whom?" That question, and the paperwork behind it, is now the gatekeeper for every retail marketing asset in the sector.
This lesson shows how consumer-protection rules reshape who you target, how you distribute, and what your marketing is actually allowed to claim.
Two frameworks dominate.
Consumer Duty is a set of rules from the UK's Financial Conduct Authority (FCA), the regulator for financial firms. In force for open products since July 2023, it requires firms to deliver "good outcomes" for retail customers. It has four outcomes: products and services, price and value, consumer understanding, and consumer support. Marketing touches all four, especially "consumer understanding."
The common thread across all three: marketing cannot promise, imply, or emphasise what the product does not reliably deliver to the specific people you are selling to.
The FCA's Consumer Duty pages are a good free primer: FCA Consumer Duty.
Before you write a single line of copy, you define the target market: the specific customer group a product is designed for. This comes from MiFID II product governance and is reinforced by Consumer Duty.
Take our multi-asset fund. A real target-market definition names concrete attributes:
Just as important is the negative target market: who this is NOT for. Here, that includes anyone needing capital certainty, anyone with a horizon under 3 years, and anyone seeking guaranteed income.
Your target market now constrains your creative. "Built for your future" implies a long horizon, which is fine. But a rotating banner that says "Access your money anytime" while the product suits a 5-year hold creates a mismatch between message and target market. That is exactly the friction compliance will flag.
The distribution channel must also match. If the fund is designed for non-advised investors, marketing it via execution-only platforms (like a UK investment platform where the customer picks funds themselves) fits. Pushing it through channels aimed at sophisticated investors does not.
Consumer Duty's price and value outcome requires firms to assess whether the product offers fair value: a reasonable relationship between the price paid and the benefits received. Crucially, marketing claims about value must be backed by this assessment, not the other way around.
You cannot say "great value" as a slogan. You must be able to point to evidence.
Suppose our fund has an ongoing charges figure (OCF) of 0.85% per year. The OCF is the annual cost of running the fund as a percentage of assets. To sense-check value, you compare against a relevant peer group.
Illustrative example (figures are hypothetical, for teaching only):
On a £10,000 investment, 0.85% is £85 per year. The passive alternative at 0.25% is £25 per year, a £60 difference. Your fair-value assessment must justify that £60: for example, active asset allocation, downside management, or a specific outcome the passive option does not target. If it cannot, "value" language should not appear in the marketing at all.
This is the discipline: every value claim traces back to a documented assessment. UK-authorised fund managers also publish an annual "Assessment of Value" report, and marketing should never contradict it.
The FCA defines a vulnerable customer as someone who, due to their personal circumstances, is especially susceptible to harm. Four drivers: health, life events (bereavement, job loss), resilience (low ability to withstand shocks), and capability (low financial or digital literacy).
This is not an edge case. FCA research has estimated that a large share of UK adults show one or more characteristics of vulnerability (commonly cited as roughly half, per the FCA Financial Lives survey; treat as an estimate and check the latest edition). Your marketing must work for them too.
Comprehension testing. For our fund, this means checking that the landing pagelanding pageA standalone web page built for a single campaign goal, designed to maximise conversions by removing distractions and focusing visitors on one action.View full definition → can be understood by someone with basic financial literacy. Plain language. Reading-age testing (many firms target a reading age around 9 to 11 for retail copy). No unexplained jargon like "drawdown" or "volatility" without a definition.
Risk-symmetry. Benefits and risks get equal visual weight. A large green "up to 6% growth" figure with a tiny grey risk warning fails. FINRA's fair-and-balanced principle in the US demands the same symmetry.
Design that does not exploit. Countdown timers ("offer ends in 2 hours") and pre-ticked boxes are pressure tactics. For a resilience-vulnerable customer, urgency framing can trigger a decision they cannot afford. Under Consumer Duty, this is a foreseeable-harm problem, not just a UX choice.
Channel accessibility. If a meaningful segment of your target market has low digital capability, a purely app-based journey with no phone support fails the consumer-support outcome.
The key shift: vulnerability is not a niche segment you carve out. It is a lens you apply to the mainstream message.
Knowledge check
1. The compliance team's question "Steady for whom?" best illustrates which underlying principle of consumer-protection marketing rules?
2. A firm is drafting copy for a new retail fund. According to the lesson's logic, when should the target-market assessment happen?
3. Which statement best captures the 'common thread' linking Consumer Duty, MiFID II/PRIIPs, and SEC/FINRA rules?
4. Select ALL correct answers about the FCA's Consumer Duty framework.
Select all the correct answers.
5. Select ALL correct answers matching consumer-protection instruments to their correct jurisdiction or purpose.
Select all the correct answers.
Now assemble the gate. Before the multi-asset fund's campaign goes live, a defensible pre-launch checklist looks like this.
In the UK, any invitation to invest is a financial promotion, and it must be approved by an FCA-authorised person before publication. Since 2024, firms approving promotions for others need specific FCA permission under the financial promotion approval regime. So step one: confirm who is signing off and that they hold the right permission.
1. Target-market match. Does every claim align with the defined target market and avoid appealing to the negative target market?
2. Fair, clear, not misleading. This is the bedrock FCA standard (COBS 4). Balanced presentation of risk and reward.
3. Value substantiation. Every price or value claim maps to the fair-value assessment.
4. Past performance rules. If shown, past performance must carry the standard warning ("past performance is not a guide to future performance"), cover a required minimum period (commonly 5 years or since launch), and not be cherry-picked. The US and EU have equivalent rules.
5. Consistency with the KID/prospectus. No marketing claim can go beyond or contradict the official documents.
6. Vulnerability screen. Reading age, risk symmetry, no pressure design, accessible support.
7. Record-keeping. Keep the approved version, the sign-off, and the evidence trail. If the regulator asks "steady for whom?", you can answer with a document, not an opinion.
Before: "Steady growth, built for your future. Access your money anytime."
After: "This fund aims for capital growth over 5 years or more by investing across shares and bonds. Its value can fall as well as rise, and you may get back less than you invest. Designed for investors comfortable with medium risk. Past performance is not a guide to the future."
The second version is longer and less punchy. It is also the one that survives a Consumer Duty review, because message and product finally match.