It is an adage as old as time - the Golden Rule - one taught to children everywhere.

And now the FCA is looking to put firms with retail customers on the naughty step if they do not follow it. If only it was that simple, however. Under current FCA Principles and rules, and with many years of jurisprudential precedent, a duty of care exists. 

What the FCA appears to be seeking to do is to impose a specific duty on firms which deal directly with retail customers or which deal with counterparties which themselves have retail customers to take into account clients' (individual) behavioural biases and lack of negotiating power and also the information asymmetry that exists between customers and firms designing, building and offering products and services to them.

The proposals will result, the FCA says, in a higher standard of care than exists currently, so that firms will "get it right the first time" and monitor their customers' outcomes to ensure it remains "right". This will be a move from "ensuring proper process" to "ensuring proper outcomes". 

Be under no misapprehension: this duty is by design one which will be incredibly difficult for firms to satisfy and is bound to lead to a drop in products and services available to customers. Not (just) because the "bad apples" will be removed (which of course is no bad thing) but because every relationship with every customer will become one of "agency" (as such term is used in English law rather than the FCA Handbook or FSMA).

Whatever the outcome of the consultation, the FCA shows every intention of pushing ahead with this and other reforms with increasingly less oversight from courts and parliamentarians.

Caveat venditor.