A UK outcomes-based standard requiring firms to act to deliver good outcomes for retail customers across products, price and value, consumer understanding and support.
The duty goes beyond disclosure. Firms must show that products are designed for an identified target market, that price represents fair value for the benefits delivered, that communications are tested for understanding rather than merely accurate, and that support does not make it harder to exit than to enter.
Boards must review outcomes annually with data, and firms must identify and act on groups of customers receiving poor outcomes, including those with characteristics of vulnerability.
For trading platforms the sharpest edges are fair value assessments on spreads and financing charges, and the requirement that high-risk product marketing be matched to the target market rather than broadcast widely.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Risk and reward on one trade. One trade on a price scale: the entry sits 2.00 points above the stop and 6.00 points below the target, so the shaded reward band is three times the risk band. The ratio compares what is lost if the stop is hit with what is gained if the target is reached.
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