The Financial Conduct Authority (FCA) is not intending to introduce a fiduciary duty via its consumer duty consultation.

The regulator made the revelation in a webinar today about its proposed consumer duty currently under consultation.

Senior officials at the regulator including Sheldon Mills and Nisha Arora urged stakeholders to realise how ground-breaking the duty is.

They pointed out the consumer duty is a major evolution in the way the FCA supervises the market.

The key point is the regulator wants authorised firms to move from a focus on processes to consumer outcomes.

During the webinar senior officials noted that the FCA has seen too many business models that depend on consumers making poor choices.

It has also seen firms exploiting consumer bias and information asymmetry.

The FCA intends to replace current treat customers fairly guidance in the form of better customer outcomes.

It wants to take the Prod rules and apply the standard across all retail markets.

Right now Prod rules only apply to investment and insurance markets.

FCA executive director of consumer and retail policy Nisha Arora said: “How is the consumer duty different? It sets up a higher standard than previously and is a package of measures that consist of rules guidance, and principles.

“We are expecting firms to consider outcomes through the whole journey from product to sale. We will change how we regulate as well. We will require more judgement and less box ticking.”

In the consultation the regulator is seeking views on two options for the Consumer Principle, that it currently views as best expressing the change it wants to drive.

These are ‘a firm must act to deliver good outcomes for retail clients’ or ‘a firm must act in the best interests of retail clients’.

On this point Arora said: “The firms must act in the best interests of retail clients is not intended or meant to introduce a fiduciary duty. The new duty of care would not be sufficient on its own, so that is why we are proposing a suite of guidance underneath.

“We want to drive a shift of focus and are gearing up to enforce and supervise this new duty. If this works, we won’t have to introduce price caps when markets perform badly.”

Some organisations have warned the FCA is on thin ice with its new consumer duty proposals such as the Transparency Task Force.

Its founder Andy Agathangelou condemned the proposals as “grossly misleading” in an open letter to FCA chair Charles Randell.

The consultation ends on 31 July.

During the webinar FCA executive director for consumers and competition Sheldon Mills said: “Firms have a much greater ability to monitor consumer behaviour. When consumers are vulnerable, mislead or not products not easy to understand; then we need a new consumer duty. We want to see firms focus on consumer outcomes. We want firms to ask would I be happy to be treated this way?”