Consumer Duty and Finprom: Why the FCA Is Raising the Bar Again

When the Consumer Duty came into force, many firms understandably treated it as a conduct and product governance exercise. Value assessments, target market definitions and outcome testing were all essential, but largely inward-looking.

The FCA is now making it clear that this interpretation is incomplete.

Through its recent guidance on the application of the Consumer Duty to financial promotions (GC26/2), the Financial Conduct Authority has removed any lingering ambiguity. Financial promotions are not peripheral to Consumer Duty, they are central to it.

This matters because promotions are often where consumer harm starts.

Promotions are outcomes, not just communications

One of the FCA’s strongest signals in GC26/2 is its framing of financial promotions as part of the consumer outcome, not merely a compliance artefact.

In practical terms, this means firms must now be able to demonstrate that:

• Promotional content is likely to be understood by the intended audience
• Key information is prominent, balanced and timely
• The overall impression of the promotion does not mislead, even if individual statements are technically accurate

The FCA is explicit that compliance with rules like COBS 4 or CONC is no longer sufficient on its own. Promotions must also meet the Consumer Duty’s higher-level standard of acting in good faith, avoiding foreseeable harm and supporting informed decision-making.

This represents a subtle but important shift, from rule adherence to outcome ownership.

The “average consumer” is no longer a safe assumption

Another important clarification in the guidance is how firms should think about their audience.

The FCA moves away from a generic “average consumer” benchmark and instead expects firms to assess realistic consumer understanding within the specific target market. That includes:

• Levels of financial literacy
• Vulnerability characteristics
• The platform or medium being used, for example social media versus long-form documents

A disclaimer that works in a product brochure may fail entirely in a short-form social post. Likewise, an image-led promotion can create a misleading overall impression even if the text itself is compliant.

The FCA’s message is clear. Format, context and presentation matter as much as wording.

Governance expectations are rising fast

GC26/2 also raises the bar on governance and oversight of promotions.

Firms are expected to have:

• Clear accountability for Consumer Duty compliance across marketing and distribution
• Robust approval and review processes that consider outcomes, not just checklists
• Evidence that promotions are tested, monitored and refined based on real-world use

Crucially, the FCA signals that it expects ongoing monitoring, not just point-in-time approval. Promotions that remain live, particularly on social media, must be periodically reassessed as products, markets or consumer risks evolve.

This is especially relevant for firms with high volumes of digital content, multiple channels or third-party distribution arrangements.

Enforcement is no longer hypothetical

While GC26/2 is guidance rather than enforcement action, it sits alongside a growing body of FCA interventions targeting misleading or harmful financial advertising. This is particularly evident in higher-risk areas such as investments, crypto, BNPL and claims-based marketing.

The direction of travel is consistent:

• Promotions are increasingly used as early indicators of conduct risk
• The FCA expects firms to be able to explain why a promotion delivers good outcomes
• “We followed the rules” is no longer a sufficient defence

For compliance and marketing teams alike, this means closer collaboration and shared ownership. Consumer Duty cannot be something that is simply handed over at sign-off.

What firms should be doing now

In practical terms, firms should be asking themselves:

• Can we evidence that our promotions support informed decision-making for the specific audience we target?
• Do our review processes assess overall consumer impact, not just individual statements?
• Are we monitoring live content, especially social media, through a Consumer Duty lens?
• Could we explain our promotional decisions confidently to the regulator six months after publication?

For many firms, the challenge is not intent but scale. Promotions are high-volume, multi-format and fast-moving, exactly the conditions where Consumer Duty risk can creep in unnoticed.

Final thoughts

The FCA is not asking firms to stop marketing. It is asking them to market responsibly, with consumer outcomes front and centre.

GC26/2 reinforces a simple truth. If a promotion influences a consumer decision, it falls squarely within the Consumer Duty.

Firms that recognise this early, and adapt their governance, tooling and cross-team collaboration accordingly, will be far better placed for the next phase of regulatory scrutiny.