Making finance simple: Why financial services companies need to change the way they speak

A firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.

Financial Conduct Authority

Companies in the finance sector are obliged to communicate with customers in a way they can clearly understand. So how are they doing with making finance simple?

Although the customer is supposed to be king, this hasn’t always been the case when it comes to talking about money and personal finance. Despite financial services firms working hard on their communications, the industry watchdog was concerned that some were presenting information in a misleading or difficult to understand way, making it harder for consumers to make informed decisions.  

The Financial Conduct Authority (FCA) also considered that some firms were: 

• Selling consumers products or services that weren’t right for them
• Offering poor-value products
• Providing inadequate customer service and support 

So the FCA decided to do something about it. It put in place a Consumer Duty – tough rules to better protect customers.

The Duty was phased in from 31 July 2023 and came fully into force in July 2024.

Read more: here’s how to talk to customers in a cost-of-living crisis.

Putting customer needs first 

The FCA couldn’t have spelled it out more clearly – financial services companies must “put their customers’ needs first”. In other words, they need to make finance simple. 

According to the Consumer Duty, this means that consumers should:

• Receive communications they can understand 
• Get products and services that meet their needs and offer fair value 
• Get the customer support they need, when they need it 

Who does the Consumer Duty apply to?

Any firm which provides financial services or payment services, and which deals with retail clients. 

What does it mean in practice?

The FCA wants companies to deliver good outcomes for consumers. It sets out its expectations for what financial firms must do in four key areas of the customer relationship:  

• The governance of products and services 
• Price and value 
• Consumer understanding
• Consumer support

We’ll leave the discussions about governance and fair value to the pricing, product and legal experts. Here we’ll look at what Consumer Duty means in terms of communications needs and customer support.  

The FCA says delivering a good outcome for consumers sets a higher standard than is currently set out in its Principle 7.

This states: “A firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.”

So, what does this higher standard look like? 

Preventing harm 

Firms must now act to prevent foreseeable harm by explaining any terms of service and significant risks “in a way that customers are likely to understand”.  

While this obviously focuses on marketing activities, financial promotions and the pre-sale customer journey, it’s not confined to them. The care mustn’t stop once the customer has bought the product or service – it has to continue throughout the product cycle – with customers being prompted into action to help them avoid something that would negatively impact them. For example, it outlaws ‘sludge’ practices that make it hard for customers to switch or cancel.

Firms need to look at their customer journey and check across all their communications – websites, product materials, letters and emails – to make sure they’re fulfilling the requirements. They also need to look at how well complaints are handled and what more can be done to prevent similar issues in future.

A close eye also needs to be paid to the press – for example if the media exposes new potential problems, there’s now an expectation that firms take appropriate action to mitigate the risk of harm to consumers. This could be anything from updating the design of a product to changing advice to a customer. 

Tailored responses

It’s not a one-size-fits-all situation. Communications must be tailored to consider the needs of customers at the receiving end including:

• Any characteristics of vulnerability
• The complexity of products 
• The communication channel used
• The role of the firm

Where complex information has to be provided because of disclosure requirements, firms must think about what they can do to support customer understanding. For example, the FCA suggests a layered approach to provide context or explain key information in a simple way. This could be a cover letter, which also signposts more detailed information that consumers may want to consider or may be helpful at a later date. 

Avoiding behavioural biases

The FCA says firms must avoid communicating in a way that ‘exploits consumers’ information asymmetries and behavioural biases’. 

This applies to situations where communications encourage customers to make decisions without possessing all the relevant information.  

For instance, the FCA identified poor practices around charging information on investment platforms, including:

• No succinct, comprehensive list of charges clearly signposted
• Information spread out across different web pages
• Too many links to different sections and pages
• No clear statement of the interest applying to any cash held
• Information ‘hidden away’ in legalistically worded terms and conditions 

Other examples of poor practice include things like too much focus on benefits and not enough on risks.

A channel-agnostic approach 

Firms use many different channels to provide customer support, including telephone, email, in-branch, text, webchat and video calls. The FCA doesn’t prescribe which channels firms must offer, but they must make sure the support channels they do use meet the needs of their customers. This includes customers dealing with nonstandard issues, and vulnerable customers. 

While acknowledging that many of us now use mobiles to organise our finances, the FCA also understands what that means in reality. We’re much less likely to read lengthy disclosure documents when applying for a product on a smartphone. Because of this, firms need to consider how much content the customer is likely to meaningfully engage with on mobile and what more they need to do so they can make a well-informed decision.

The FCA takes a dim view of firms that have long call-waiting times for customers trying to resolve problems. It says customers should not wait significantly longer for their call to be answered in relation to a post-sale issue than they would to take out a product or service.  

Similarly, firms may find they have to respond more quickly when customers contact them on social media.

Making finance simple: the story so far

The FCA published a review of firms’ approaches to the consumer support element of the Consumer Duty in March 2025. On the plus side, it found, for example, that most firms were considering how the support they provide meets customers’ needs. It also found that many have reviewed their customer support journeys and monitored whether customers are getting the support they need.

But it also found areas where improvement is needed. These include firms lacking an understanding of their target market and some people experiencing long wait times for support.

Supporting consumer understanding in terms of access to support is also felt to be an area for improvement. As the review says: ‘Some firms have more to do to ensure they communicate and present information in a way that makes support processes accessible to customers.’

Better one-to-one communications 

When interacting one-to-one with a customer, firms must tailor their communication to meet the information needs of that customer. They need to ask them if they understand the information and if they have any further questions.

Communications testing 

Financial firms should test, monitor and adapt communications to support understanding and good outcomes for customers.  

One requirement is that where firms test comms for effectiveness in maximising sales, they must do equivalent tests to check that consumer understanding levels result in good customer outcomes. 

Firms will also have to make sure that their monitoring and feedback loops are working effectively. For example, if it becomes clear from call centres or complaints that customers are frequently asking the same questions or there are issues commonly causing confusion, firms may need to clarify these issues more broadly.

What good communications look like 

The FCA expects communications to be: 

• Layered – key information is provided up-front with links to more detailed help. Where the customer needs to make a choice about a product or service, the key information is likely to include the key features, benefits, risks and costs of that product or service. When layering, firms should make sure the information they provide is coherent and consistent. 
• Engaging – communication must be designed to encourage users to engage. The FCA says key information should be easy to identify. “For example, by means of headings and layout, bullet points, display and font attributes of text.” Tables, graphs, diagrams, graphics, audio-visuals and interactive media can also be used to improve the effectiveness of communications by making them more engaging. 
• Relevant – firms should consider the appropriate level of detail for each communication. The target market for a complicated investment product may have different information needs to the target market for a simple, mass-market product, for example.  
• Simple – information should be presented logically. Jargon or technical terms should be avoided. If that’s not possible, they must be explained “in plain and intelligible language that consumers are likely to understand”.
• Well-timed – information should be provided at an appropriate time or touch point. For example, costs should be shown early in the customer journey and in easy-to-read ways rather than in the fine print. And post-sale support must be as accessible and effective as presale support.

Getting it wrong

Examples of poor communication cited by the FCA include: 

• Banks that encouraged customers to focus on the daily cost of an overdraft rather than the cumulative cost of borrowing. 
• Funeral plans that didn’t talk enough about the downsides, such as the increased costs of paying by instalments, or that the plan might not provide a funeral service. 

The story so far

The FCA’s Financial Lives 2024 Survey was produced before the Duty was fully in force. However, it gives some indication of how consumers are experiencing communications from financial services providers.

The report found that nine times out of 10 (89%) written information from providers helped product holders make an informed and timely decision or action. But this wasn’t across the board – written information from credit lenders was less likely to be helpful.

It also found that in 16% of instances, people found it difficult to get or couldn’t get the written information they needed from their financial services provider. This rose to 29% of instances among those with ‘other’ employment status.

And in 77% of instances, people found it easy to understand the written information provided by their financial services provider. But this dropped to 55% of contacts in relation to defined contribution pensions.

So while the general picture is positive, there is still some way to go to truly make finance simple.

How can Sticky help? 

Sticky has been working with financial firms for 20+ years to make their communications clearer and more engaging. As well as copywriting, we can audit your content, put forward strategies based on FCA guidance, create animations and video content and improve your UX and customer journeys too.  Learn to build better connections – get in touch today.