17th March, 2023
It’s understandable that you will see a lot written and spoken about Consumer Duty over the weeks and months ahead, and for some experienced, somewhat ‘long in the tooth’ later life advisers, there may be the temptation to switch off from that.
In a word, don’t.
The consequences of thinking this doesn’t apply to you and your business, or perhaps even thinking that you already have everything in place, do not bear thinking about it, because it is 100 per cent likely that it does apply to you and/or you don’t have everything ready.
I was reminded of this at a recent ‘Breakfast with Stuart’ meeting in which we discussed the huge swathe of information, support, guidance, events, etc, that are available to advisers and firms when it comes to meeting their Consumer Duty responsibilities.
One regular lender contributor to the meeting spoke about a recent adviser contact – whose firm is part of a network – who assured them they had filled out all the necessary Consumer Duty forms, they had ticked all the boxes, and were as ready as they were ever going to be.
When it was pointed out this couldn’t possibly be the case, I’m not sure what the response was, but the fact the adviser hadn’t asked this lender representative for their fair value assessment documentation, suggested they were not ready.
Indeed, the lender is still working on this, so again the adviser couldn’t possibly be at a point of total readiness.
Now, this isn’t necessarily a slight on the adviser, because after all they were probably following the process as laid out by their network, who may well have said that if you do this, you’ll be fine.
A work in progress
However, the point should be made that Consumer Duty is a moveable feast. It reminds me of the Retail Distribution Review when the real nitty gritty of the rules were not actually apparent until a few months before (and after) implementation.
In other words, this was regulation which needed to be seen in the practical instances of providing advice, not just in the theory as laid out by the regulator.
And, so it’s the case with Consumer Duty, because the Financial Conduct Authority (FCA) is not prescribing to every single firm what they must do, but instead is leaving it to firms themselves to deliver within the wider rule set.
Just recently, I spoke to an adviser who (slightly) berated me for the guidance and support Air was providing to members, suggesting that it wasn’t tailored enough to their individual firm. Again, I had to point out that this was nigh on impossible because Consumer Duty is not about one set of forms that can be completed for each and every different firm, it’s not about a series of boxes that can be ticked.
A tailored approach
In fact, that’s sort of the whole point, that the individual firm concerned takes everything into account, the way they operate, the way they charge, the way they individually work with clients, and brings the Consumer Duty requirements into that specific advisory experience and offering to meet their responsibilities.
We can’t script answers to every single eventuality or every single later life advice proposition – and indeed that wouldn’t even be desirable for delivering positive outcomes anyway, because you can guarantee something would be missed along the line.
The FCA wants firms to take ownership of Consumer Duty, and specifically integrate it into the business. Not be reliant on others telling them what they should do, and what they might want to change.
It can sound somewhat daunting but, as mentioned, there is a huge amount of resource and support available to help and I would advise advisers and firms to make the most of it.
I can guarantee every single event, summit and webinar will be covering Consumer Duty in some way, shape or form over the course of the year. Get engaged and make sure you’re all over the biggest regulatory ‘story’ of 2023 and beyond.