Consumer Duty and the SMF Framework: Where Accountability Actually Sits

The Consumer Duty introduced a new, principles-based standard for how regulated firms treat retail customers, and it arrived without a dedicated new SMF designation to go with it. That’s created genuine confusion at firms trying to work out exactly whose Statement of Responsibilities should reflect Consumer Duty accountability, and how existing SMF holders’ obligations actually change as a result. This guide sets out where the accountability actually lands.

No New Designation, But Real Accountability Nonetheless

Unlike some regulatory developments that generate a new named SMF, the Consumer Duty was layered onto the existing SMCR structure rather than creating a standalone function. That doesn’t mean the accountability is diffuse or theoretical — it means firms have to work out, deliberately, which existing SMF holders’ Statements of Responsibilities need updating to reflect it, rather than waiting for the FCA to hand them a pre-built answer.

Board-Level Accountability

The FCA expects the board — and by extension the SMF9 chair specifically — to have genuine oversight of the firm’s Consumer Duty compliance, including receiving and substantively engaging with an annual board report on customer outcomes across the four Duty outcomes: products and services, price and value, consumer understanding, and consumer support. A board that receives this report and doesn’t meaningfully interrogate it is not discharging the oversight the FCA expects, and a chair who allows that pattern to continue is exposed under the same behavioural independence standard that governs the rest of the SMF9 role.

Chief Executive Accountability

SMF1 holders carry practical responsibility for making sure the Consumer Duty is genuinely embedded in the firm’s culture and operating model, not simply reflected in a policy document. This connects directly to the broader SMF1 accountability for overall conduct standards across the firm — Consumer Duty compliance is, in substance, a specific and detailed expression of a responsibility the chief executive already carries in general terms.

Compliance Oversight Accountability

SMF16 holders typically carry the most direct, hands-on accountability for the Consumer Duty’s practical implementation — monitoring customer outcomes data, identifying where products, pricing or communications may not be delivering good outcomes, and escalating concerns clearly rather than allowing them to be absorbed quietly at business level. Where a firm’s SMF16 holder lacks genuine authority to challenge commercially attractive product or pricing decisions on Consumer Duty grounds, the same independence problem we describe in relation to SMF16 generally becomes a live Consumer Duty risk specifically.

Remuneration Committee Accountability

The SMF12 chair carries a Consumer Duty dimension that’s easy to overlook: making sure incentive structures for customer-facing staff and their managers don’t create pressure to prioritise sales volume over good customer outcomes. A remuneration structure that rewards revenue without reference to customer outcome measures is a direct Consumer Duty risk sitting inside the remuneration committee’s own remit, and a well-briefed SMF12 candidate should understand this connection explicitly rather than treating remuneration governance and Consumer Duty as separate conversations.

Where Firms Get This Wrong

The most common failure pattern is treating Consumer Duty as “a compliance project” assigned to SMF16 alone, without genuinely updating the Statements of Responsibilities of the chair, the CEO, and the remuneration committee chair to reflect their own specific accountability. This creates exactly the kind of diffuse, undocumented responsibility that both the SMCR generally and recent enforcement activity specifically have shown the FCA takes a dim view of. A properly governed firm can point to precisely which SMF holder is accountable for which dimension of Consumer Duty compliance, documented in the same way as any other SMF accountability — not simply assert that “compliance handles it.”

The second common failure is recruiting into SMF16 or SMF1 without testing candidates specifically for Consumer Duty fluency, treating it as a general compliance topic any experienced candidate will have picked up along the way. Given how central it now is to day-to-day supervisory engagement, particularly for retail-facing firms, a candidate without genuine, current Consumer Duty implementation experience is starting from a real disadvantage regardless of their broader compliance credentials.

What This Means for Recruitment

Firms recruiting into SMF1, SMF9, SMF12 or SMF16 at retail-facing regulated firms should treat demonstrated Consumer Duty experience as a specific, testable requirement in the brief — not an assumed byproduct of general seniority. For SMF16 candidates especially, direct experience building or running Consumer Duty monitoring and outcomes reporting, rather than simply having overseen its introduction from a distance, is the clearest signal of genuine readiness.