The Consumer Duty annual assessment: a repeatable four-step process
The annual assessment does not have to be a yearly scramble. Run as a repeatable four-step cycle, it is the natural output of the monitoring you already do — and CP26/23 proportionality means a small firm does not need a bigger process, just a real one. Done as a cycle rather than an event, the assessment is assembly, not archaeology.
What the FCA says about the annual assessment
The Consumer Duty requires firms to assess, at least annually, whether they are delivering good outcomes for retail customers and whether any changes are needed. The FCA's Consumer Duty pages tie that assessment to the firm's governing body — it is a record the board reviews and approves. The Consumer Duty publications library keeps the assessment and the monitoring behind it in scope for all firms, with good and poor practice examples of what the record looks like when it is real and when it is reconstructed at the last minute.
For smaller firms the FCA has consulted on how the duty applies proportionately, including how the annual cycle scales with firm size, in CP26/23 (Consumer Duty: scope and proportionality). Our guide to what CP26/23 means for the small-firm evidence burden covers the detail; the short version is that the process can be lighter, the demonstration of outcomes cannot.
The four steps, at file level
Each step maps to records you already hold.
- 1
Scope
Define what the assessment covers: the four outcome areas, the advice types you give, and the client segments. Proportionate to your firm — but explicit about what is in scope and what is not.
- 2
Monitor
Pull the evidence your monitoring already produced through the year — file reviews scored against a fixed rubric, outcomes tracked, gaps logged. If monitoring ran, this step is assembly, not discovery.
- 3
Review
Look at what the data says. Where are the amber and fail trends? What gaps got closed and which did not? The review is the honest read of your own monitoring, not a summary of intentions.
- 4
Report
Produce the board report that records the assessment: what you checked, what you found, what changed. The report is the output of the first three steps — do the monitoring and the report writes itself.
The July timing matters: the FCA has linked the annual assessment to the annual board report cycle. Run the assessment before the board meeting, and the board report is the record of it.
A worked example: a year in four steps
Before
July scramble. The assessment says a compliance review was done the month before, written up from three sample files with no recorded rationale, no rubric version, and no outcome data. The board reads a summary of intentions; nothing behind it can be checked.
After
A cycle log across the year: quarterly reviews against rubric rev 3, 12 checks each; the September data pull; the October review meeting where the amber themes and three open gaps got named owners; and the board report the same week, with counts, trends, and a closure list against last year's gaps. The assessment is a folder of records with a cover page, not a memory play.
Common mistakes in annual assessments
- Written from memory, not monitoring data. If the assessment cannot quote the year's graded results, the process that produced it did not run.
- Scope drift. The assessment covers whatever happened to be reviewed rather than a defined scope — outcome areas, advice types, client segments — agreed at the start of the year.
- Reviewing intentions instead of outcomes. “We intended to strengthen cost disclosure” is not the same as “six amber files on cost disclosure in Q2, two advisers re-trained, re-scored to pass in Q3.”
- A gap list with no owner. Findings without owners and dates cannot be reviewed next year, which makes the whole assessment a collection of open loops.
Scope, monitor, review, report
| Step | What it produces |
|---|---|
| Scope | A one-page definition of the outcome areas, advice types, and client segments in scope. |
| Monitor | The year's graded logs, outcomes data, and gap list, pulled together. |
| Review | The honest read: amber and fail trends, what closed and what did not. |
| Report | The board page recording what you checked, what you found, what changed. |
Related reads
The assessment is the once-a-year roll-up of the same evidence. See the Consumer Duty outcomes monitoring hub for how that evidence is built, an FCA information request for how it gets tested in between, and the evidence checklist for what counts as a record at every step.
Frequently asked questions
Is the annual assessment required every year?
Yes. The Consumer Duty expects firms to assess, at least annually, whether they are delivering good outcomes for retail customers, and the assessment is tied to the firm's governing body: the board reviews and approves it. The FCA's Consumer Duty publications library keeps that expectation in scope.
Does CP26/23 let a small firm skip the annual assessment?
No. CP26/23 is a consultation on the scope of the duty and how it applies proportionately to smaller firms. A proportionate process contracts the machinery — the cycle can be lighter — but it still has to demonstrate outcomes. The assessment record is the demonstration.
When in the year should the assessment run?
At the point that suits your board cycle, provided it runs before the meeting that records it. The FCA has linked the assessment to the annual board report, so the board minute is the natural record — and the assessment should be assembled from the year's monitoring, not the two weeks before the meeting.
Your next step
Scope the assessment on one page now, pull the quarter's graded logs as you go, review the themes in October, and put the board page in front of your governing body in July. Proven Duty holds the rubric, the graded logs, and the summary, so the annual assessment is assembled from the year's records rather than reconstructed. Start a free trial or see pricing.