The FCA has recently issued important clarifications on how Consumer Duty applies to firms that co-manufacture financial products or services. While the regulator is clear that this does not introduce new rules, it does sharpen supervisory expectations—particularly for firms partnering on product design, manufacture, or distribution.

For regulated firms, and the onboarding and product governance teams that support them, this is a timely reminder: clarity of roles, robust documentation, and strong evidence trails are no longer optional.

Why the FCA Issued This Clarification

Since the introduction of Consumer Duty, firms have raised questions about how responsibilities should be allocated where more than one entity is involved in manufacturing a product or service. The FCA’s clarification is designed to address inconsistent interpretations and reinforce a core principle:

Firms must understand, document, and be able to evidence who is responsible for what across the product lifecycle.

This applies regardless of whether a firm sees itself as a “lead manufacturer,” “co-manufacturer,” or specialist partner.

Key Expectations for Co-Manufacturers

The FCA’s message is consistent and practical, emphasizing the need to move beyond assumptions and into documented practice:

• Clear Allocation of Responsibilities: Co-manufacturers must explicitly agree who is responsible for target market definition, value assessments, outcome monitoring, and governance.

• Documented Agreements, Not Assumptions: Supervisors will expect written agreements that reflect actual operating practices—not informal understandings or legacy contracts.

• End-to-End Outcome Focus: Each firm remains accountable for ensuring good consumer outcomes within its sphere of influence, even when activities are shared.
• Proportionate but Defensible Oversight: The FCA recognises proportionality, but firms must still be able to evidence how they oversee partners and manage risks.

Operational Implications for Firms

These clarifications translate directly into new or strengthened compliance workstreams across the organisation:

1. Onboarding & Supplier Due Diligence

• Validate partner roles against Consumer Duty obligations at the onboarding stage.
• Review contractual clauses relating to product governance, data sharing, and escalation.
• Ensure onboarding packs capture evidence of Duty responsibilities and controls.

2. Product Governance & Oversight

• Re-assess governance frameworks for jointly manufactured products.
• Confirm target market definitions and value assessments are aligned across partners.
• Maintain clear records of challenge, decision-making, and ongoing monitoring.

3. Evidence & Audit Readiness

• Supervisors will expect firms to demonstrate how Consumer Duty responsibilities are operationalised—not just described.

• Evidence trails must show how information flows between co-manufacturers and how issues are identified and addressed.

Why This Matters Now

The FCA has indicated it will consult further in 2026 on refining Consumer Duty requirements across distribution chains. In the meantime, supervisory focus is firmly on how firms are applying the existing rules in practice.

For firms working with third-party manufacturers, distributors, or technology partners, this clarification should act as a trigger to re-examine contracts, onboarding processes, and governance documentation before a supervisor does.

How MEMA Consultants Can Help

At MEMA Consultants, we support firms in translating regulatory expectations into practical, auditable operating models. From onboarding frameworks and supplier governance reviews to Consumer Duty evidence mapping, we help firms demonstrate clarity, accountability, and control across complex partnerships.

If your products or services are co-manufactured, now is the right time to ensure your Consumer Duty framework is defensible, proportionate, and supervisor-ready.

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