Consumer Duty
7 steps to demonstrating fair value
2 min read 12 Aug 25
One of the most challenging rules for advisers to emerge from Consumer Duty is the Price and Value outcome.
That’s why we’ve refreshed our guide to Fair Value, a practical tool you can turn to at any time to support your Consumer Duty efforts. Now aligned with current practice and understanding, two years on from the Duty’s introduction, this guide reflects how the regulation is embedded in day-to-day operations.
What’s in the guide?
We recap the FCA’s definition of fair value, and how it expects firms to apply it.
The guide focuses on some of the inherent challenges in demonstrating fair value while clearly explaining why value is certainly not the same as price. Examples, templates and key questions for adviser firms feature throughout the guide, all designed to help you build and maintain your plans and processes.
You’ll also find plenty of practical actions your firm can take to comply with the regulator’s expectations. Such as steps to build a fair value assessment framework.
The 7 Steps
To facilitate good practice, you’ll be taken through seven important steps to demonstrating fair value:
1. Identifying your target market
2. Determining what benefits clients receive from your service
3. Deciding how benefits can be assessed and evidenced
4. Determining the cost to deliver your service
5. Determining your expected total price
6. Benchmarking the total costs and charges against the market
7. Determining your implementation plan
The guide highlights the regulator’s adaptable approach to assessing value, tailored to the type and size of your firm. However, it also points out that while you don’t need to charge all clients the same amount, it’s essential to ensure that the price charged reflects fair value in relation to the benefits received for each client segment.
For advice firms that already understand the benefits they provide to their target markets, meeting the fair value rules shouldn’t be too onerous. And where extra work is needed, this may provide a valuable opportunity for firms to step back, assess the business holistically and evaluate what value their clients are receiving.
More change on the way?
In March 2025, the FCA announced its Consumer Duty review, including plans to roll out guides for small firms. This followed the FCA’s call for input in 2024 which asked firms for opinions on the cost-burden of regulation, with a possible view to streamlining rules and regulations.
Despite its name, the Consumer Duty review is not about changing the Duty itself, but rather how it interacts with other existing rules. The FCA has confirmed it will publish dedicated guides for small firms in 2025, though a specific release date has not yet been announced.
With the core outcomes and principles at the heart of the Consumer Duty very much here to stay, this guide to fair value is a valuable resource that can make staying on top of regulation that little bit easier.
Take a moment to read the Fair Value Best Practice guide
The information contained in this page is for professional Financial Adviser use only. If you are a private investor, please visit the Private Investor section or contact your Financial Adviser for more information.