Practitioners — Financial Advisers · published 2026-05-26 · methodology v2.1

Legal basis of the Consumer Duty — the role of FSMA 2023

RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002

What the RLB Specialist Panel found

1. Legal basis of the Consumer Duty — the role of FSMA 2023

Question (paraphrased to protect IP): Was the Consumer Duty created through primary legislation or FCA rulemaking? What is the legal basis for Principle 12 and PRIN 2A, and did FSMA 2023 have any role in creating it?
Source regulation: Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority (Regulator portal: https://www.fca.org.uk)
What AI assistants typically say: AI tools correctly identify that the Consumer Duty was introduced through FCA rulemaking under the Financial Services and Markets Act 2000, and cite FCA instrument FCA 2022/31 as the relevant mechanism. However, the AI fails to address FSMA 2023's relationship to the Duty at all — leaving entirely unanswered the specific question of whether FSMA 2023 played any role in creating it.
What the regulator actually says: FSMA 2023 did not create the Consumer Duty.
Why the AI went wrong: The AI answered the question it found easiest — the FSMA 2000 legal basis — while simply omitting the FSMA 2023 component that the question specifically asked about. The result is a response that is technically accurate in what it says but misleading in what it leaves out, because a practitioner asking the question would naturally assume the AI had addressed it in full.
Cited source(s):
https://www.akingump.com/en/insights/alerts/new-fca-principle-12-consumer-duty — Pretextual

Impact for this audience

A Financial Adviser who accepts the AI's account of the Consumer Duty's legal basis without querying the FSMA 2023 dimension may give clients an incomplete picture of the framework's legislative grounding. While this particular omission may not produce immediate compliance exposure, it signals a pattern of partial answers on foundational questions — and in a regulated context, advisers are expected to understand and accurately convey the legal basis of the obligations they advise on. The FCA's enforcement approach to Consumer Duty is evidence-based: a firm that cannot articulate the correct legal basis of its obligations may struggle to demonstrate adequate governance in any supervisory review.

References — raw findings (per AI model)

RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q002-Sonnet46 Claude Sonnet 4.6 (web search on)

This finding also affects

Next finding → Finding 2. Foreseeable harm and customer-accepted risk under the Consumer Duty

Cite this finding

Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.

Plain text

RegLeg Specialist Panel (2026). "Legal basis of the Consumer Duty — the role of FSMA 2023 — Practitioners — Financial Advisers." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002. RegLegBrief AI Hallucination Research, published 2026-05-26. https://reglegbrief.com/audiences/practitioners/gb/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

APA 7th edition

RegLeg Specialist Panel. (2026). Legal basis of the Consumer Duty — the role of FSMA 2023 [Hallucination finding RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/audiences/practitioners/gb/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

Bluebook / OSCOLA (US + UK legal)

RegLeg Specialist Panel, Legal basis of the Consumer Duty — the role of FSMA 2023 [RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002], RegLegBrief AI Hallucination Research (May 26, 2026), https://reglegbrief.com/audiences/practitioners/gb/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/.

BibTeX

@misc{reglegbrief_RLB_F_GB_FCA_CONSUMER_DUTY_PS22_9_Q002,
  author    = {RegLeg Specialist Panel},
  title     = {Legal basis of the Consumer Duty — the role of FSMA 2023},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002},
  url       = {https://reglegbrief.com/audiences/practitioners/gb/financial-advisers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/}
}

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