Consumer Duty

Learn more about how we are addressing Consumer Duty. Effective from 31 July 2023.

Background

On 27 July 2022, the Financial Conduct Authority (‘FCA’) published its Policy Statement with final rules and guidance introducing a new Consumer Duty (“the Duty”) - a significant initiative which imposes higher standards in the level of care provided to UK retail customers and increases the obligations of all financial services firms. The FCA is concerned that financial services do not always work well for UK retail consumers and the Duty has been designed to fundamentally shift the mindset of firms.

The Duty is a significant piece of regulation and applies to the whole financial services sector including sectors such as insurance and banking.

The Duty, which is effective from 31 July 2023, requires all firms involved in the design, manufacture and distribution of products to retail consumers to perform detailed and proactive monitoring of consumer outcomes throughout the product life-cycle.

Scope

Ninety One has conducted a full review to determine which products and services are within scope of the Duty. In scope products and services are those where Ninety One entities are part of the distribution chain to UK retail consumers and where we can determine or materially influence the outcome for those customers.

The following Ninety One funds are in scope of the Duty currently:

  • All Ninety One Fund Series i-iv OEIC sub-funds (“Ninety One OEIC Funds”).
  • All sub-funds of the Ninety One Global Strategy Fund (“Ninety One GSF”).

Further detail on the applicability of the Duty to the Ninety One funds is below.

The FCA expects that information will need to be shared across the manufacturing and distribution chain to allow firms to comply with the Duty. Where appropriate, Ninety One has issued notices to Distributors outlining the responsibilities of the parties in meeting the objectives of the Duty. All firms which offer, sell, recommend, advise on, arrange, deal, propose or provide an in scope fund which we manufacture, will be a ‘Distributor’ of our funds.

The FCA has made it clear that the definition of Distributor is deliberately broad and captures all firms in a distribution chain that ends in a retail customer. As such, IFAs and execution-only / nominee service providers are also ‘Distributors’ under the Duty definition.

When the Duty comes into effect, Distributors will need to provide us with information and documents in relation to the funds that we manufacture to fulfil both our and their obligations under the Duty.

What Information do Distributors and Manufacturers need to share?

The FCA expects that information will need to be shared across the manufacturing and distribution chain to allow firms to comply with the Duty. Where appropriate, Ninety One has issued notices to Distributors outlining the responsibilities of the parties in meeting the objectives of the Duty. All firms which offer, sell, recommend, advise on, arrange, deal, propose or provide an in scope fund which we manufacture, will be a ‘Distributor’ of our funds.

The FCA has made it clear that the definition of Distributor is deliberately broad and captures all firms in a distribution chain that ends in a retail customer. As such, IFAs and execution-only / nominee service providers are also ‘Distributors’ under the Duty definition.

When the Duty comes into effect, Distributors will need to provide us with information and documents in relation to the funds that we manufacture to fulfil both our and their obligations under the Duty.

What information is Ninety One issuing to Distributors?

Like many in the industry, we intend to provide information to distributors through the European MiFID II Template (‘EMT’), which has been enhanced to include a new section for UK funds (although we may use other methods or standards in the future).

The EMT is available through a range of data providers from which you may already receive data feeds relating to other information on the Ninety One Funds. The timing of this availability is dependent on the readiness of the specific data vendors. The latest EMT can also be found here.

Please also find a copy of our latest Value Assessment Report in relation to the Ninety One OEIC Funds on our website here: Value Assessment Report.

Please note that Ninety One GSF, as a Luxembourg domiciled fund, is subject to determination and supervision of costs and fees by its management company in Luxembourg (as is required by the CSSF) and the fund board. It therefore does not produce a separate UK Value Assessment Report.

We intend to provide all other required information about the Ninety One funds and our product approval process on request.

What information does Ninety One expect to receive from Distributors?

Manufacturers are required to monitor that their products are delivering good consumer outcomes.

To help support this, we expect that distributors are likely to provide the following:

  • Information regarding sales within the defined target market and distribution strategy or a nil return if there is nothing to report.
  • Details of any remedial actions to prevent harm if sales have been made outside of the target market.
  • Sales information or product issues related to vulnerable customers.
  • Product related complaints data.

Acknowledging that this is an area that is still evolving, Ninety One’s preferred approach is to adopt industry practice and industry standard templates for providing feedback and the frequency of the return to be in line with industry recommendations.

We would appreciate insight from Distributors regarding their intended approach to fulfilling information sharing obligations between manufacturers and distributors under the Duty.

Who do I contact for more information or to provide Distributor feedback?

  • If you would like to discuss the Duty with us, please contact your usual Ninety One contact or email us at: [email protected]
  • If you have feedback for us relating to the Duty, including sales or other data points, please contact us at: [email protected]
  • The EMT is available through a range of data providers from which you may already receive data feeds relating to other information on the Ninety One Funds. The timing of this availability is dependent on the readiness of the specific data vendors. The latest EMT can also be found here.

Related content

European MiFID II Template

The EMT is available through a range of data providers from which you may already receive data feeds relating to other information on the Ninety One Funds. The timing of this availability is dependent on the readiness of the specific data vendors. The latest EMT can also be found here.