16 Commonly asked questions What is the difference between the scope of the product and services outcome and the existing product governance (PROD) rules? The consumer duty will be compatible with, but will not replace product governance (PROD). The products and services outcome will apply in a proportionate way to different sectors than those covered in PROD rules. The products and services outcome applies to all products and services offered to ‘retail customers’ This will include, for example investment, insurance, mortgage, payment services and consumer credit products and services. It also applies, in line with the Consumer Duty generally, to prospective as well as existing customers. The PROD rules are more granular and apply to investment and insurance products and services only. For example: • MiFID investment products, for example, unit trusts, Open-Ended Investment Companies (OEICs), investment trusts, structured products etc. • MiFID services, such as investment advice and portfolio management • Non-investment insurance contracts (pure protection contracts and life policies such as long-term insurance contracts and annuities) • Insurance-Based Investment Products (IBIPs) • Insurance based pensions • General insurance The PROD rules already set out specific requirements for the design, approval, marketing and management of the above products and services. Under the consumer duty there will be an overarching requirement set out in the FCA’s Principles (PRIN) sourcebook that all products and services sold to customers must be fit for purpose and targeted at the retail clients whose needs they are designed to meet. Firms will therefore need to consider both their consumer duty obligations and, if relevant, the specific obligations set out in the PROD rules.
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