8th March 2023
Consumer duty not quite hitting the spot
Last month we floated the idea that the upcoming implementation of Consumer Duty for FCA regulated firms was really nothing more than a re-dressing of TCF. New clothes for the Emperor.
Results from our survey would confirm many agreed. So far, we have had some 187 responses that are not painting a picture of universal support.
Ahead of our survey the FCA had said “the consumer understanding and outcome of the most ‘excellent’ consumer duty should benefit firms by reducing complaints and driving healthy competition. Its aim is to reduce poor outcomes by improving the information individuals are given about a product or service”.
The FCA’s Richard Wilson further observed “In a nutshell, we want consumers to be given the information they need at the right time and presented in a way they can understand so that when they're applying for, say, a loan or taking out insurance or making an investment, they can understand enough about the product, say how it works, its benefits, risks and costs to be able to make good decisions,”
He added: “That's really important because we want consumers to be in a position to make informed decisions and choose products and services that best meet their needs.”
Responses received so far are quite illuminating!
We asked for example:
Have you made the appropriate changes to your business?
Only 34% had fully completed the processes.
“We’re pretty much there. I have to say, though, it has been a ginormous waste of time. Any good business will already be doing the sort of things expected of us”.
“After running a practice for 38 years, and enduring numerous regulatory initiatives, I feel well qualified to say this is a complete waste of time. We consider we have a fiduciary”.
Do you feel that Providers ARE proactive in offering support to advisers?
Only 21% thought they are. Despite the huge efforts put in by provider firms a somewhat sad and telling comment was “A mixed bag - some are, some aren't. Some have no idea”
Has the FCA support to advisers been helpful / easy to understand?
Only a staggering 4% reckoned yes. Some comments:
“Too much jargon - not enough clear examples of what they think "it" looks like”
They can't even explain it themselves I've seen webinars with the supposed top guy at the FCA to do with Consumer Duty and he seemed so unsure of himself and what the whole thing is about
Do you think that the Consumer Duty is something your clients will view in a positive light?
65% said no with 26% just not being sure
87% thought Consumer Duty will result in an increase in the cost of running their business and 57% would you pass on any increased business costs to their clients.
Only 4.35% thought the Consumer Duty will impact consumers in a positive way? 82% see Consumer Duty as nothing more than TCF getting a makeover.
We will be closing our survey later this month and would very much appreciate you input. Are the responses received so far a fair barometer?
Tell us here, no names needed, what you think. The results will be sent to the FCA.
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