FCA Consumer Duty — Fair Value Assessment

FCA Consumer Duty Fair Value Assessment UK Retail Banking Insurance Regulatory PRIN 2A FG22/5

Overview

Elaborate and validate Fair Value Assessments (FVAs) for UK retail banking and insurance products under the FCA Consumer Duty. Covers PRIN 2A, FG22/5, required FVA sections, price-vs-value and vulnerable-customer consideration. Works alongside disclosure (plain English) and customer-journey (sludge) checks.

Tools

validate_fair_value_assessment — Validates an FVA document against FCA Consumer Duty structure. Checks for required sections (product identification, target market, benefits, limitations, total price, price vs value conclusion, distribution, vulnerable customers, governance), unfilled placeholders, and evidence of fair-value and vulnerable-customer consideration. Run after drafting or revising an FVA. Parameter: path (path to the FVA Markdown file).

Getting Started

Add your product details and any existing FVA or disclosure text to the workspace, then activate the FCA Consumer Duty — Fair Value Assessment skill. Use the bundled template to draft the FVA, then run validate_fair_value_assessment on the draft. For full Duty compliance, combine with consumer_duty_validator on disclosure documents and sludge_practice_detector on customer journey descriptions when those skills are available.

Example conversation — New savings product FVA

You: We need a Fair Value Assessment for our new easy-access savings account (2.5% AER). Target market is UK retail savers. Can you draft it from the template and then validate?
Agent: I’ll create the FVA using the template and fill in the sections from your brief, then run the validator.
Agent: Draft is in docs/fva_savings_easy_access.md. I’ve populated product identification, target market, benefits (interest, FSCS protection, easy access), limitations (rate variable, withdrawal limits), total price (no fees; effective cost = opportunity cost vs alternatives), and a fair-value conclusion. I’ve added a short section on vulnerable customers (clarity of terms, access to support) and governance. Running validate_fair_value_assessment now.
Agent: Validator result: all required sections present; no structural errors. One INFO: consider adding an explicit “next review date” in the governance section. I can add that and a one-line assessment date if you want.
You: Yes, add review date 12 months from approval.
Agent: Updated. Governance section now includes “Assessment date: [today]” and “Next review date: [12 months from approval]”. FVA is structurally complete; you may want legal or compliance to confirm the fair-value narrative before sign-off.

Sample output

1. Validator report (excerpt)

FCA Consumer Duty — Fair Value Assessment validation
====================================================
Document: docs/fva_savings_easy_access.md

--- ERRORS ---
  (none)

--- WARNINGS ---
  (none)

--- INFO ---
  INFO: No clear assessment or review date found. Consider adding assessment date and next review date.

Structural check: required sections present. Address warnings before finalising.

2. FVA document (excerpt)

6. Price versus value conclusion

We have assessed whether the total price (no fees; effective cost is the foregone interest vs higher-paying or fixed-term alternatives) is reasonable relative to the benefits (interest at 2.5% AER, FSCS protection, instant access). For the target market (UK retail savers seeking simple, low-friction access), we conclude fair value is achieved: the product offers a competitive easy-access rate with no hidden charges and clear terms. Distribution is direct; no intermediary remuneration. We will review this assessment in 12 months or on material change.

8. Vulnerable customers

We have considered vulnerable customers in the design and value assessment: key risks are complexity and access to support. The product is simple (single rate, no tiers), and we provide clear summary documents and telephone/chat support. No sludge in the opening or closure journey. This supports fair value for customers who may be less confident or need extra help.

What the tool verifies

Check	Description
Required sections	Product/service identification, target market, benefits, limitations, total price, price vs value conclusion, distribution and incentives, vulnerable customers, governance and approval.
Fair value wording	Looks for explicit fair-value or price-vs-value conclusion (e.g. “fair value achieved”, “reasonable relative to benefits”).
Vulnerable customers	Flags if the document does not mention vulnerable customers or vulnerability.
Placeholders	Detects unfilled placeholders such as `[TODO]`, `[TBD]`, `[INSERT]`, or bracketed blanks.
Dates	Suggests adding assessment date and next review date if no date pattern is found.

The tool does not replace legal or compliance review; it checks structure and coverage. Final sign-off remains with the firm’s governance.