Glossary

The compliance glossary

Plain-English definitions of the terms UK advice firms meet every day — from the Consumer Duty and vulnerable customers to equity release, call QA and AI.

15 terms

The Consumer Duty

Consumer Duty: The FCA's rules requiring firms to act to deliver good outcomes for retail customers, set out in Principle 12 and PRIN 2A. It came into force on 31 July 2023 for products and services open to sale or renewal, and on 31 July 2024 for closed products and services.A practical guide to the Consumer Duty
Principle 12: The consumer principle at the heart of the Duty: "A firm must act to deliver good outcomes for retail customers." Where it applies, it replaces Principles 6 and 7.A practical guide to the Consumer Duty
PRIN 2A: The chapter of the FCA Handbook's Principles for Businesses sourcebook that contains the Consumer Duty's detailed rules — the cross-cutting rules, the four outcomes, and requirements on governance and monitoring.A practical guide to the Consumer Duty
PS22/9: The FCA policy statement, published in July 2022, that introduced the Consumer Duty and its rules: Principle 12 and the rules in PRIN 2A, with the FCA's guidance in FG22/5.A practical guide to the Consumer Duty
FG22/5: The FCA's final guidance on the Consumer Duty, published alongside PS22/9, explaining how the FCA expects firms to meet the rules in Principle 12 and PRIN 2A.A practical guide to the Consumer Duty
Cross-cutting rules: Three rules that apply to all of a firm's conduct under the Duty: act in good faith towards retail customers, avoid causing them foreseeable harm, and enable and support them to pursue their financial objectives.A practical guide to the Consumer Duty
The four outcomes: The Duty's outcome areas: products and services (PRIN 2A.3), price and value (PRIN 2A.4), consumer understanding (PRIN 2A.5) and consumer support (PRIN 2A.6).How COSA evidences each outcome
Fair value assessment: Under the price and value outcome, an assessment of whether the price a customer pays for a product or service is reasonable compared with the benefits they can expect.
Consumer understanding outcome: One of the Consumer Duty's four outcomes, set out in PRIN 2A.5. Firms must support customers' understanding so that their communications meet customers' information needs, are likely to be understood, and equip them to make effective, timely and properly informed decisions. It applies before, during and after a sale, in every channel; on a one-to-one call it includes, where appropriate, asking whether the customer understands and has any further questions.The consumer understanding outcome on advice calls
Consumer support outcome: One of the Consumer Duty's four outcomes, set out in PRIN 2A.6. Firms must design and deliver support that meets customers' needs, including those of customers with characteristics of vulnerability, enables them to use the product as reasonably anticipated, includes appropriate friction in customer journeys to mitigate the risk of harm, and ensures they face no unreasonable barriers, including unreasonable additional costs, during the life of the product.The consumer support outcome on advice calls
Sludge: Unnecessary friction that makes it harder for customers to act in their own interests — such as complicated processes to complain, switch or cancel. The consumer support outcome expects firms to avoid unreasonable barriers.A practical guide to the Consumer Duty
Outcomes monitoring: The Consumer Duty requirement (PRIN 2A.9) to regularly monitor the outcomes retail customers receive from a firm's products, communications and customer support. It must show whether customers get products designed to meet their needs, fair value, the right information and the support they need, and whether any group gets different outcomes. The FCA has said collecting data or reporting MI will not, by itself, show whether customers get good outcomes.Consumer Duty outcomes monitoring
Root cause analysis: Working out why something went wrong, so the underlying cause can be fixed, not just the individual case. PRIN 2A.9 requires processes to identify the root causes of any failure to deliver the Consumer Duty outcomes it covers, and the complaints rules in DISP 1.3 require firms to take reasonable steps to identify and remedy recurring or systemic problems, for example by analysing the causes of complaints.Complaints root cause analysis
Consumer Duty board report: The assessment a firm's governing body must review and approve at least annually, setting out whether the firm is delivering good outcomes for its customers and what action it will take where it isn't. FCA consultation CP26/23 (2026) proposes dropping the need for a stand-alone report; until final rules are published, the current requirement applies.What to include from your client calls
Consumer Duty champion: The board-level member firms were expected to appoint to help make sure the Duty was raised regularly in the board's discussions, alongside the chair and CEO. Since 27 February 2025 the FCA no longer expects firms to have one, though they may keep the role.Consumer Duty board reports and call evidence

4 terms

Vulnerable customers

Vulnerable customer: In the FCA's words, someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care. Vulnerability can be temporary, sporadic or permanent.Identifying vulnerable customers on calls
FG21/1: The FCA's guidance for firms on the fair treatment of vulnerable customers, published in February 2021. It groups the causes of vulnerability into four drivers: health, life events, resilience and capability.Identifying vulnerable customers on calls
Drivers of vulnerability: The four areas FG21/1 uses to group the causes of vulnerability: health, life events, resilience and capability. A customer can be affected by more than one.FG21/1's four drivers, applied to calls
Teach-back: Asking a customer to explain a key point in their own words, to check they have understood it. Stronger evidence of understanding than asking whether something "makes sense".

6 terms

Governance and accountability

SM&CR: The Senior Managers and Certification Regime, which makes individuals accountable for the areas they are responsible for. It has applied to FCA solo-regulated firms since 9 December 2019.AI in financial services compliance
Duty of responsibility: Under SM&CR, the FCA's power to act against a senior manager where their firm breaches a regulatory requirement in an area they are responsible for managing, and they did not take the steps a person in their position could reasonably be expected to take to avoid the breach. The burden of proof is on the FCA, not the senior manager.Reasonable steps and the duty of responsibility
Reasonable steps: The test senior managers are judged against under SM&CR, in the duty of responsibility and the Senior Manager Conduct Rules SC1 to SC3. For the duty of responsibility, the FCA's guidance in DEPP 6.2 asks what a competent senior manager would have done at the time, in that person's position and role, and in all the circumstances. The FCA says it will not apply hindsight; its guidance is not prescriptive.SM&CR reasonable steps for advice oversight
Management information (MI): The data a firm's managers and board use to oversee the business. Under the Duty, good MI shows the outcomes customers receive, not just the activity the firm carried out.Compliance MI your board will read
Audit trail: A record of who did what, and when — for example logins, uploads, exports and changes to results — that lets a firm show how a decision was reached.How COSA secures and logs activity
DISP: The Dispute Resolution: Complaints sourcebook in the FCA Handbook, which sets out how firms must handle complaints.

9 terms

Equity release

Lifetime mortgage: The most common form of equity release: a loan secured on the home, where interest is usually added to the loan and the balance is repaid, typically from the sale of the home, when the last borrower dies or moves into long-term care.Equity release call compliance
Home reversion: A form of equity release in which part or all of a home is sold to a provider in return for a lump sum or regular payments, with the right to go on living there.
Interest roll-up: Interest that is added to the loan rather than paid each month, so interest is then charged on the interest and the balance grows over time.Equity release advice calls: a compliance checklist
No negative equity guarantee: A protection in plans that meet the Equity Release Council's standards: the borrower will never owe more than the value of their home, so no debt is passed on to their estate.Equity release advice calls: a compliance checklist
Early repayment charge (ERC): A charge for repaying a loan, or more than an agreed amount of it, earlier than the terms allow. Early repayment charges are among the costs an adviser should explain on an equity release call.Equity release advice calls: a compliance checklist
Key Facts Illustration (KFI): The illustration an equity release customer receives setting out a plan's key features, its costs and how the amount owed could grow. On the call, the adviser should confirm it will follow and that the figures discussed match it.Equity release advice calls: a compliance checklist
Equity Release Council: The trade body for the UK equity release sector. Its members follow the Council's rules and product standards, and plans that meet those standards include protections such as the no negative equity guarantee.
Independent legal advice: Advice from the customer's own solicitor, which plans meeting the Equity Release Council's standards require before completion.Equity release advice calls: a compliance checklist
MCOB: The FCA's Mortgages and Home Finance: Conduct of Business sourcebook. MCOB 8 sets the advising and selling standards for equity release.Equity release advice calls: a compliance checklist

14 terms

Call QA and monitoring

Call QA: Quality assurance of recorded calls: checking conversations against a firm's standards and regulatory requirements, and acting on what is found.How AI call monitoring works and how to roll it out
Call recording rules (SYSC 10A): FCA rules on recording calls and electronic communications, replacing the COBS 11.8 taping rules. In-scope firms must take all reasonable steps to record calls about listed activities in financial instruments, such as dealing, arranging or managing investments, and keep them for five years, or up to seven if the FCA requests. Some retail investment advisers may instead keep a written note, on conditions. Not every firm or call is covered.FCA call recording requirements
Call QA scorecard: The form a reviewer uses to check a recorded call against the firm's standards item by item, with evidence such as a timestamp and quote for each result; also called a call monitoring form. A template for advice calls might cover disclosures, needs, alternatives, costs and risks, vulnerability, understanding and next steps. The format, scoring method and any pass mark are the firm's own design choices.A call QA scorecard template
Critical fail (auto-fail): An item on a call QA scorecard serious enough that failing it fails the whole call, whatever the rest of the scorecard shows, such as mishandled vulnerability or a material misstatement of cost or risk. Critical fails are usually kept outside any weighted total, so a high score cannot hide a harmful call. The firm decides which items are critical; they work best when objective and checkable in the recording.Which misses should fail a call
QA calibration: Keeping call QA reviewers consistent. Reviewers assess the same calls independently, then compare their results item by item rather than on totals, agree how each item should be judged, and reword any item that caused disagreement. Recording what was agreed, and tracking agreement over time, helps show whether a result depends on the call or on who reviewed it.How to run a QA calibration session
Call sampling: Reviewing a subset of calls — chosen at random or by risk — and using the results to draw conclusions about all of them. Good at estimating common issues; poor at catching rare ones.How many calls should you review?
100% call monitoring: Assessing every in-scope call rather than a sample, usually with an automated first pass and human review of the calls that are flagged.How AI call monitoring works and how to roll it out
Speech analytics: Technology that searches and categorises recorded calls at scale, traditionally by spotting keywords and phrases, phonetically in the audio or in a transcript, and reporting trends. Keyword spotting shows whether particular words were said; on its own it cannot judge whether a requirement was met when the adviser put it differently. Assessing each call against written rules, with quoted evidence for every verdict, is designed to answer that question.How AI call monitoring works
Call-selection policy: The settings that decide which calls are assessed — for example call direction, call types, minimum and maximum length, and whether calls were answered. In COSA, every excluded call is logged with its reason.How COSA chooses which calls to assess
Verbatim rule: A compliance rule that checks specific words were said, such as a recording notice or a scripted risk warning.Writing rules an AI can check
Non-verbatim rule: A compliance rule that checks a topic was covered, however the adviser phrased it — for example, that interest roll-up was explained.Writing rules an AI can check
Override: An authorised reviewer changing an automated result. In COSA the original verdict is kept for audit, and automatic re-runs never replace a reviewer's decision.Reviewer overrides in COSA
Triage: In COSA, the queue of calls whose type couldn't be classified with confidence — for example fact find or follow-up — held for a person to confirm so the right rules run.How COSA handles uncertain calls
Speaker diarisation: Separating a recording by speaker, so a transcript shows who said what. In COSA, each call becomes a speaker-labelled transcript, which is what rules and reviewers work from.Speaker-labelled transcripts in COSA

5 terms

AI and data

Retrieval-augmented generation (RAG): An approach in which an AI system first retrieves the passages most relevant to a question from a set of documents — such as a client's call transcripts — and then answers from those passages, which lets it cite its sources.How cited AI answers work
Citation: A link from part of an AI answer to the passage it came from. In the COSA Assistant, each citation shows the call, the time range and how closely the passage matched, and can play the recording from that moment.The COSA Assistant
Confidence score: An indication of how certain an automated assessment is about a result, so reviewers can prioritise what to check.
Data protection impact assessment (DPIA): An assessment UK GDPR requires before processing that is likely to result in a high risk to individuals — which often includes large-scale processing of call recordings with AI.Rolling out AI call monitoring
Special category data: Personal data UK GDPR treats as more sensitive — including health information — which needs an additional condition for processing. Calls often contain it.Handling health information on calls

11 terms

AI calling

AI dialler: Software that places outbound calls and holds the conversation itself, using an AI voice agent, rather than connecting each answered call to a person. COSA's AI Dialler follows up a firm's own enquiries, answers from knowledge the firm has approved and books a call with an adviser.The COSA AI Dialler
AI voice agent: An AI system that holds a spoken phone conversation in real time: it listens, decides what to say and replies in a synthesised voice. In a regulated firm it gives information and books appointments; advice stays with qualified people.AI voice agents and the Consumer Duty
PECR: The Privacy and Electronic Communications Regulations 2003, which set the UK rules on marketing calls, texts and emails, alongside UK GDPR. The ICO enforces them; the Data (Use and Access) Act 2025 raised the maximum fine to £17.5 million or 4% of global turnover.Is AI calling legal in the UK?
Automated calling system: Under PECR regulation 19, a system that can automatically make a sequence of calls and transmit sounds that are not live speech. Marketing calls made this way need the person's prior consent, specifically for automated calls. The ICO has said a system using an AI-synthesised voice fell within the definition.Is AI calling legal in the UK?
Telephone Preference Service (TPS): The UK's register of individuals who have opted out of unsolicited live marketing calls; the Corporate TPS (CTPS) does the same for businesses. Under PECR, firms must not make unsolicited live marketing calls to registered numbers unless the person has agreed to calls from them.TPS and AI calls
Solicited call: A call the person asked for, such as a call back they requested on an enquiry form. Most PECR live-call rules don't apply to solicited calls, and under the Financial Promotion Order a real-time communication made in response to an express request is solicited. Agreeing to receive calls in general doesn't make a call solicited.Solicited and unsolicited calls
Calling line identification (CLI): The number shown to the person you're calling. Marketing callers must not withhold it, and Ofcom's guidance says it must be a valid, dialable number that uniquely identifies the caller.
Answering machine detection (AMD): Technology that judges whether a call was answered by a person or an answerphone. Detection takes a moment, so a dialler needs a plan for that gap: COSA's AI Dialler plays a short neutral line if it hasn't decided, and never leaves marketing messages on answerphones.
Abandoned and silent calls: Calls a person answers to find no one there, or that are cut off. Ofcom treats them as a form of persistent misuse of a network; the usual cause is a dialler placing more calls than there are people available to take them.
Warm transfer: Passing a live call to a colleague after briefing them, rather than simply putting it through. In COSA's AI Dialler, where a firm turns it on, the adviser hears a short private brief and chooses to connect.Booking and handover
Speed to lead: How quickly a firm first contacts someone after they enquire. Research published in Harvard Business Review in 2011 found firms that contacted a web lead within an hour were far more likely to qualify it than those that waited longer.What the speed-to-lead research says

Definitions are general information, not legal or regulatory advice. For your firm's obligations, refer to the FCA Handbook and the FCA's guidance.

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