Consumer Duty fair value: the price and value outcome explained for advice firms
The price and value outcome (PRIN 2A.4) is about whether the price the client pays is justified by the value they receive. At file level, that means a fair-value assessment, value for money against alternatives, and ongoing charges that are disclosed and earned.
The guides at a glance
| Guide | What it covers |
|---|---|
| File-level value paragraph | Justifying a recommendation against the alternatives. |
| Six-step assessment | The fair value assessment step by step, at advice-firm scale. |
| Ongoing charges | The per-client log that evidences value for money. |
| PRIN 2A.4 explained | The price and value outcome, rule by rule. |
The gap most files have is not the assessment — it is the documentation. A recommendation that names the cost and the alternatives, and explains why this product at this cost for this client, is the evidence the outcome asks for.
What the FCA says about fair value
Fair value is one of the four outcomes of the Consumer Duty. Under the price and value outcome, a firm must ensure the price paid by customers is reasonable when compared to the benefits they receive. The rule requires firms to assess value for customers, including where products give rise to ongoing charges. The FCA's Consumer Duty pages set out the four outcome areas, and the fair-value rule itself sits in PRIN 2A.4 of the FCA Handbook.
The FCA has not stopped at the rule. Its review of the price and value outcome — held in the Consumer Duty publications library — examined how firms evidence fair value in practice, including the treatment of ongoing advice charges and the disclosures clients see before they pay. The fair-value framework the FCA set out in that review is the practical shape this guide follows: define value, quantify the price, compare, assess, document, and revisit.
What fair value means at file level
At file level, fair value has to be visible in three places: the recommendation, the cost disclosure, and the ongoing service record. A reviewer should be able to open any of the three and find the price stated, the value described, and the reasoning that connects them.
- The recommendation. Why this product for this client, at this price, versus the alternatives that were considered. Our fair value at file level guide shows the exact wording a recommendation needs.
- The cost disclosure. Total cost in pounds, not just percentages — initial, ongoing, and what happens on exit. The price and value outcome explained breaks the rule down check by check.
- The ongoing service record. What the client actually received for the ongoing charge, in a dated log. This is the piece most files lack, and the piece the FCA's review of the price and value outcome focused on. Our value for money on ongoing charges guide covers it in detail.
The assessment itself should follow the same framework every time, so a reviewer can compare one file with another. The six-step fair value assessment gives the repeatable shape: define value, quantify the price, compare against alternatives, check customer understanding, assess ongoing value, and document the conclusion.
Two outcomes sit alongside price and value and belong in the same review. Consumer understanding (PRIN 2A.5) asks whether the client actually understood the cost and what they are paying for, and ongoing service (PRIN 2A.6) asks whether the firm is providing the service it promised for the charge it takes. A file can pass a fair-value test on paper and still fail the outcome if nothing shows the client understood the price or received the service. Including both checks in the review is what makes the assessment complete rather than theoretical.
Worked example: justifying a recommendation at cost
Before
“Platform recommended due to its range of funds. Ongoing charge 0.75% plus platform fee.” — cost is disclosed as a percentage, but no total, no alternatives, and no value justification.
After
“Total ongoing cost £1,340 per year (0.75% advice plus 0.25% platform), equivalent to the platform B charge of £1,290. Benefits received: automated rebalancing, quarterly review, and direct portfolio access. Annual advice value justified by service log: three review meetings, two rebalances, one tax-optimisation recommendation.” — the same recommendation, with the price, the comparison, and the value documented.
The second version answers the fair-value question cold: price in pounds, alternatives named, value defined, and the ongoing service recorded against the charge.
Common mistakes in fair-value documentation
- Percentages without pounds. A charge of 0.75% is not self-evidently fair or unfair to a client — or to a reviewer. Restating it as an annual cost in pounds is the difference between abstraction and disclosure.
- No alternatives on record. Value is a comparison. A recommendation that never names what else was considered cannot show it was value for money against those alternatives.
- Ongoing charge with no ongoing service. Where an ongoing charge is taken, the service log has to earn it. See the ongoing-charge value guide for what the log should contain.
- One-off assessment at sale only. Fair value is ongoing. If a client's situation changes and nothing is re-assessed, the file goes stale — and with it the value justification.
- Assessment without the customer. The price and value outcome sits alongside consumer understanding. If the client evidence in the file does not show the cost was understood, the firm cannot claim the price was fair to that customer.
The fair-value checklist
| File element | Evidence to find |
|---|---|
| Price stated | Total cost in pounds, initial and ongoing |
| Value defined | The benefits the client receives, tied to their objectives |
| Alternatives compared | Options considered and why this one at this cost |
| Understanding shown | Evidence the cost and value were explained and understood |
| Ongoing value logged | Service delivered against the ongoing charge, dated |
| Revisit recorded | Re-assessment on material change, dated |
Related reads
- The fair value assessment: a six-step framework — the repeatable process behind every defensible file.
- The price and value outcome (PRIN 2A.4) explained — the rule, check by check.
- Fair value at file level — wording for the recommendation itself.
- Proving value for money on ongoing charges — the ongoing service record in detail.
Frequently asked questions
Is fair value the same as cheap?
No. Fair value is the relationship between price and value for the individual customer. A fee can be high and still be fair if the value delivered — and the alternatives considered — justify it. The FCA's Consumer Duty pages set out the price and value outcome, and the rule itself sits in PRIN 2A.4 of the FCA Handbook.
What evidence does a file need to show fair value?
Three things: the price stated in money terms, the value the client actually receives, and the alternatives assessed against that price. At minimum, an ongoing recommendation has to justify the ongoing charge against the service the client is receiving — a record of what was delivered, and why it is worth the charge.
When should the fair value assessment happen?
Before the recommendation is made, and again whenever the situation changes — new information, a client moving between services, or a charging change. The firm's assessment should be repeatable, so a reviewer can see the same framework applied each time.
Does fair value apply to ongoing charges after the first year?
Yes. The price and value outcome is ongoing, not a point-in-time check at sale. Firms must review value for money on an ongoing basis, and the FCA's Consumer Duty publications library includes its review of the price and value outcome, which looks at how firms evidence ongoing value.
Your next step
Run the fair-value lens over five existing files: is the price in pounds, are the alternatives named, and does the ongoing service log earn the charge? Proven Duty scores every file against the price and value checks — cost disclosure, alternatives, and ongoing value — and flags the missing evidence line by line. Start with a free trial or see pricing.