Assessing fair value of investment products and services in the UK

The UK Consumer Duty built on the COLL Value assessment rules, by not only extending the scope of products and services it applies to, but also increased the level of detail required. Manufacturers are now expected to disclose the outcome of value assessments to their distributors.

As of July 31 2023, manufacturers of products and services in scope of the Consumer Duty are expected to have shared value assessment outputs across the distribution chain, and distributors are expected to have conducted analysis and assessment of those outputs to determine their own distribution strategy direct to end customers.

The relatively short timeframe to implement assessments of ‘fair value’ on a bigger scale, and reboot of the distributor target market analysis expectations has meant that many firms are facing increased cost pressure to maintain their value assessment frameworks. We recognise many firms have scaled up resourcing and capacity to deliver the Consumer Duty in a way which may not be sustainable in the long term.

How can the Deloitte Value Assessments team help you?

To help firms build on the Consumer Duty value assessment and information sharing frameworks into their ongoing TOM in a sustainable way, Deloitte has developed a programme of work to support firms streamlining their activities in this area. Our team comprises of subject matter experts in regulatory conduct and compliance as well as regulatory data and reporting, meaning that you benefit not only from market leading regulatory best practice, but access to sophisticated data and reporting solutions.

At the heart of what we do, is the understanding that each firm, product, service, and target market is different.

Owing to the unique operating models in the investment management and wealth space, the Value assessment team can support UK firms to

• Review and challenge existing methodologies developed for the COLL Regime or the Consumer Duty PRIN rules which talk to individual firm offerings and nuances. 

This review and challenge is:

• Complemented by access to market leading data solutions from our state-of-the-art regulatory reporting and tech capability.

We understand that initial attempts to meet new regulatory requirements can so often create overheads which can’t be maintained. Our data and technology experts can assist you to streamline steps in the methodology and value assessment process you’ve created, whilst remaining compliant with the relevant requirements.

Information Sharing is a key principle within the value assessments requirements, which the industry is still grappling with. Our innovative data sharing tools and solutions can automate and accelerate value assessments data out to the distribution network, as well as bespoke data reviews and quality assessments. We can work with you to define a level of automation that works for you, whilst also allowing you to maintain control and oversight of your assessments.

We can support in:

• Data collection and dissemination into reporting templates
• Data quality and effectiveness reviews
• Distributions through EMT+
• Data sharing to your investors and consumers

In doing this, we can help you stay on top of regulatory changes, best practice and can give advise using Deloitte industry insight. Our experts can help you in meet your regulatory reporting and data needs and can help to alleviate some of the concerns and manual effort required.

A vital step in the value assessments process is the Board and Executive oversight and challenge of the results, as well as the remediation actions being shared with the distribution network. Our team do not take this step lightly. As part of our solution, we can offer controlled workshops with Boards and Executives to discuss the outputs to facilitate the ever-important challenge and scrutiny.

Value assessment for Non-UK/EU firms – maintaining distribution in the UK market

The Deloitte Value Assessments Team not only assists UK firms in meeting and streamlining their activities but also firms manufacturing outside of the UK to distribute into the UK. Partnering with our Global network, we can assist non-UK firms to continue distribution in the UK. Supported by our Deloitte experts in local jurisdictions, we can create bespoke multi-jurisdictional value assessments meeting both the UK and local requirements, coupled with state of the art reporting and data sharing capabilities, to facilitate smooth hands-off data transmissions to the UK distributor network. Board and Executive workshop sessions are also offered.

Get in touch with Dimi Tsopanakos, Stephen Lucas, Paul Fraser, Jessica Castellino, or Anna Kenton to find out more about how Deloitte can help you achieve your value assessment goals.