Consumer duty

Understand how Vanguard has implemented the Consumer Duty, including key information about our obligations as a manufacturer.

This communication is intended for intermediaries distributing Vanguard’s products or services


Consumer Duty sets higher expectations for the standards of care that firms must provide to retail customers, moving to a regime that is outcomes-focused to help ensure they receive the support they need, communications they can understand, and products and services that meet their needs and offer fair value.

The Duty is comprised of the following components:

A new Consumer Principle

“A firm must act to deliver good outcomes for customers”

Principle 12

FCA, Principles for Businesses

Cross-cutting rules

These explain how firms should act to deliver good outcomes. Firms must:

  • Act in good faith towards retail customers.

  • Avoid causing foreseeable harm to retail customers.

  • Enable and support customers to pursue their financial objectives

Four outcomes

Sets out more detailed expectations in four key areas that represent key elements of the relationship between the firm and the consumer:

  • Products and services

  • Consumer understanding

  • Price and value

  • Consumer support

The Financial Conduct Authority (FCA) expects firms to put retail customers at the heart of their business by providing products and services that are designed to meet customer needs, with a key focus on those with vulnerable characteristics. This includes reviewing and testing products, undertaking value assessments, selecting distribution arrangements appropriate for the defined target market and ensuring customers receive support relevant to aid their understanding. Importantly, firms must monitor customer outcomes and, where appropriate, may be required to provide redress where harm is identified.

Vanguard’s approach to Consumer Duty

The principles of the Duty are consistent with Vanguard’s core purpose, which is “to take a stand for all investors, to treat them fairly and to give them the best chance for investment success”. Vanguard’s business model1  is centered on putting clients at the heart of what it does, meaning there is close alignment between the aims of the Duty and the way in which Vanguard serves customers every day.  

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:

  • 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.

    You can learn more about Vanguard’s assessments of how its existing open products and services provide fair value for money.

    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 separate communication. 

  • Products and 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.

    Read more about Vanguard’s reviews of existing products and services.

  • 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. 

  • 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.

Timeline and dates

Consumer Duty implementation plans approved by boards. Completed on:

Manufacturers to share information with distributors on open products and services. Completed on:

Ensure Consumer Duty compliance in respect of open products and services. Completed on:

Frequently asked questions

Glossary of terms

Descriptions from relevant parts of the Duty:

Primary distributor: Platforms that are a distributor and contractual party of Vanguard’s products and services.

Sub distributor: Those with whom there is no direct contractual relationship, but which form part of the distribution chain for retail customers. Examples would include an IFA, DFM or platform acting through a sub-distribution chain.

Distributor: A firm which offers, sells, recommends, advises on, arranges, deals, proposes or provides a product.

Distribution chain: Firms that are involved in the manufacture, provision, sale and ongoing administration and management of a product or service to the end retail customer.

Manufacturer: A firm that creates, develops, designs, issues, manages, operates, or carries out a product or service.

1 Rather than being publicly traded or owned by a small group of individuals, The Vanguard Group, Inc. is owned by Vanguard’s US-domiciled funds and exchange traded funds (ETFs). Those funds, in turn, are owned by their investors. While we cannot replicate this structure in Europe, we believe that this unique mutual structure aligns Vanguard’s interests with those of our investors globally and drives the culture, philosophy and policies throughout the Vanguard organisation worldwide. 

Important information

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

This document is directed at professional investors and should not be distributed to, or relied upon by retail investors.

This document is designed for use by, and is directed only at persons resident in the UK.

The information contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.

The information in this document does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this document when making any investment decisions.

The information contained in this document is for educational purposes only and is not a recommendation or solicitation to buy or sell investments.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.

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