Consumer Duty in commercial broking: what good evidence looks like

The hardest part of Consumer Duty is rarely the principle. Most brokers already believe in good outcomes and fair value, and most can explain, deal by deal, why the recommendation they made was the right one. The hard part is proving it, consistently, across every file, months after the conversation happened. The FCA's Consumer Duty page sets out the four outcomes in full, but the outcomes themselves are rarely where firms come unstuck.

That gap between believing and proving is where firms get into difficulty, not because the advice was poor, but because the record of it was assembled from memory long after the fact. This guide assumes the rules apply and focuses on what good evidence looks like on file. For the underlying scope and requirements, start with Consumer Duty requirements for finance brokers.

Why retrospective evidence is weak evidence

Evidence collected after the event has three structural problems, and they're the same three problems in every firm.

• It relies on recollection, which fades and reshapes itself around the outcome
• It is inconsistent between team members, because each person reconstructs differently
• It takes longest to assemble at exactly the moment it is most urgently needed

There's a fourth, subtler problem. Retrospective evidence tends to justify rather than describe. A note written at the point of recommendation records what was considered. A note written six months later records why the decision was defensible. Those aren't the same document, and a reviewer can tell them apart.

If the file has to be reconstructed, the reconstruction is the thing being reviewed — not the advice.

Evidence captured at the point of work

The alternative is to design the workflow so the compliance artefact is a required output of the stage, not an optional attachment to it. The check doesn't sit alongside the work. It's part of the work. This is the underlying idea behind Xova's workflow management tools: the capture step is built into the stage, so nobody has to remember to do it separately.

In practice that means a small number of things are captured at the moment they're true, rather than a large number of things being captured at the end.

At the point of recommendation

Record what the client asked for, what options were considered, and why the recommended product fits the client's stated objectives and circumstances. One clear paragraph written at the time is worth more than a page written later.

At the point of confirmation

Record that the client understood the key features, costs and risks, and how that understanding was confirmed. 'Explained on a call and confirmed by email on this date' is evidence. 'Client was made aware' is not.

At the point of fee agreement

Record the fee, how it was disclosed, when it was agreed and what the client received in return. Fair value is easier to demonstrate when the value side of the equation was written down at the same time as the price.

What a reviewer is actually looking for

Whether the reviewer is your own compliance function, a lender's onboarding team or a regulator, the questions are broadly consistent. A strong file answers them without commentary:

• Was the product appropriate for this client's needs and circumstances?
• Did the client understand what they were agreeing to?
• Was the total cost, including your fee, clear and fairly represented?
• Were vulnerability indicators considered and, where present, acted on?
• Is the sequence of events reconstructable from the record alone?

That last question does more work than it appears to. A file where the timeline is clear, enquiry, checks, recommendation, confirmation, submission, outcome, reads as a controlled process. A file where documents are dated inconsistently, or where the key note post-dates the completion, reads as a reconstruction regardless of how good the advice was.

Vulnerability without a tick box

Commercial clients aren't automatically outside the spirit of the Duty, and the firms handling this well have stopped treating vulnerability as a single checkbox at intake. Circumstances change over the life of a deal: a director's health, a sudden cash-flow event, or time pressure created by a chain elsewhere can all affect a client's ability to weigh a decision. We go into this in more depth in vulnerable customers and FCA guidance in commercial broking.

The practical answer is to make vulnerability a prompt at more than one stage, and to record the action taken rather than only the observation. Noting that additional time was given, that an explanation was repeated in writing, or that a second decision-maker was included is far stronger than a flag with no consequence attached.

Consistency across the desk

One broker who documents beautifully doesn't make a compliant firm. The Duty is a firm-level obligation, and the evidence a reviewer sees is the evidence produced by the least disciplined file in the sample.

Consistency comes from structure, not from training alone. When the workflow requires the same artefacts on every file, the difference between your most and least methodical broker narrows to writing style rather than substance.

The reporting layer

Good file-level evidence supports a second obligation: showing that the firm monitors outcomes in aggregate. That means being able to see patterns rather than incidents, which products generate complaints, where files stall, whether particular client segments consistently receive worse outcomes.

This only works if the underlying data is structured. Free-text notes in an inbox can't be aggregated. Fields captured at defined stages can, and the reporting becomes a query rather than a project, which is exactly what a good set of dashboards should give you: outcome trends by product and by broker, visible without a manual pull.

Board and governance reporting

Consumer Duty places an explicit expectation on firms to review outcomes at least annually and to be able to show the board, or the senior manager responsible, what that review found. A one-off audit before the review date is a poor substitute for data that's been accumulating throughout the year.

The firms that find this straightforward are the ones where the annual report is largely a summary of numbers they already had, not a fresh piece of research. That's only possible if the file-level capture described above has been happening consistently since the last review, not tightened up in the weeks before it.

What the annual review should be able to show

• Outcomes by product line, including complaint rates and time to resolution
• Any patterns in outcomes across different client segments or vulnerability indicators
• Fair value assessments for each product or fee structure still in use
• Actions taken as a result of the previous year's review, and whether they worked

Working with AML and KYC evidence together

Consumer Duty evidence rarely sits in isolation. The same file usually needs to satisfy anti-money laundering obligations at the same time, and the two are easiest to manage when they're captured through the same process rather than two parallel ones. Our guide to AML checks for commercial finance brokers covers the due diligence side in detail, and the timing overlaps: identity verification, source of funds and the suitability conversation often happen in the same week, sometimes the same call.

Treating them as one workflow rather than two reduces the number of times a client is asked for the same information, which is itself a small but real contribution to good outcomes and consumer understanding.

Fair value is not just about price

Firms sometimes read the fair value outcome as a pricing exercise: is the fee too high relative to the market. That's part of it, but not the whole of it. Fair value asks whether the price is reasonable given what the client actually receives, the work done, the access provided, the outcome achieved. A higher fee attached to a genuinely more complex case, well evidenced, can be fair value. An identical fee applied to every deal regardless of complexity is harder to defend.

The assessment doesn't need to be elaborate. A short, dated note explaining what the fee covers for this client and why it's proportionate to the work is usually enough, provided it's written at the time rather than reconstructed for a review.

Compliance as a by-product

The goal isn't to do more compliance work. It's to do the same work in a way that leaves a record behind it. When capture happens at the point of work, supported by compliance tooling that prompts for the right evidence at the right stage rather than after the fact, a review becomes a matter of reading rather than reconstructing, and the end-of-file scramble simply stops happening.