How has Vanguard implemented the Duty to date?
Vanguard already has a strong focus on customer outcomes, and as such many of its existing processes are aligned to the standards set by the Duty. There are some areas in which Vanguard has made enhancements to its processes in light of the Duty requirements and to ensure the four outcomes are appropriately embedded in its business:
(i) Price & value outcome: there must be a reasonable relationship between the price paid for a product or service and the overall benefit a customer receives from it. As such, Vanguard has undertaken additional assessments and/or reviews where appropriate to ensure all existing open products and services continue to provide fair value for money to retail consumers.
Further details of Vanguard’s assessments of how its existing open products and services provide fair value for money can be found here.
The outcomes of the completed value assessments for our UK-domiciled funds will continue to be disclosed in the annual Assessment of Value report and in the European MiFID Template (EMT V4.1) which also include outcomes for our Ireland-domiciled funds. The outcome of tour value assessments for model portfolio services will continue to be made available directly to Vanguard's primary distributors via a seperate communication.
(ii) Products & services outcome: the design of products and services must be regularly reviewed to make sure they meet the needs, characteristics and objectives of customers in the identified target market, and that their intended distribution strategies remain appropriate for customers within that market.
Vanguard has an established process for regularly reviewing its products and services. In line with the Duty, it completes reviews for all existing open products and services which include aspects of the product design, approval, testing and assessment of target market and related distribution arrangements.
Further details of Vanguard’s reviews of existing products and services can be found here.
(iii) Consumer understanding outcome: communications should support and enable customers to make informed decisions about financial products and services and give them the information they need, at the right time, and presented in a way they can understand.
Vanguard is focused on ensuring its communications: (a) are effective in delivering good customer outcomes across all channels, (b) enable retail customers to make informed decisions by selecting products that help them to pursue their financial objectives and (c) are designed in a way to support understanding by different types of retail customers, including customers who may have characteristics of vulnerability.
(IV) Consumer support outcome: customer service levels should enable customers to realise the benefits of the products and services they buy and ensure they are supported when they want to pursue their financial objectives.
Vanguard is developing further its framework to ensure our consumer support: (a) meets customer needs across all channels, (b) meets the needs of customers with consideration given to different groups of customers with different needs, including those with characteristics of vulnerability, including using feedback loops across the Distribution chain, (c) captures post-sale and pre-sale interactions, to enable consumers to pursue their financial objectives.