While working with ten firms, the FCA said it saw less focus on customer outcomes at the implementation and assurance stages when compared with the initial development and approval stages.
There was also evidence that conduct risk is not adequately cascaded and understood throughout the business. This leads to some areas being able to articulate the conduct risks associated with the strategies more clearly than others despite clear conduct remit and accountability.
The report said:
"We expect the potential customer outcomes to be fully considered and mitigated at all stages of the strategy setting process; from development through to assurance.
"We found that some firms are overly reliant on a small number of key individuals to act as conduct champions and there is a lack of succession planning for retaining conduct knowledge.
"This poses a risk to customer outcomes because, unless these conduct champions are involved in every step of the strategy formulation, there will be times when the firm will fail to challenge effectively on behalf of the customer.
"We believe more needs to be done by firms to ensure that conduct champions’ focus on good customer outcomes is not diluted or lost as strategies are implemented."