Almost two fifths (39 per cent) of financial advisers think the consumer duty will have a below medium impact on their businesses, a survey from Schroders has revealed.
The Schroders Pulse Survey, which sampled 180 UK financial advisers, found that, when asked what effect consumer duty would have on their business on a scale of one to five, 15 per cent of respondents selected the lowest option and a further 24 per cent chose the second lowest.
This is more than the 25 per cent of respondents who choose the two highest options and the 38 per cent who predicted a medium impact.
Schroders intermediary director, Gillian Hepburn, said it is “surprising” to learn that 77 per cent of respondents believe that consumer duty will only have a medium to low impact on their business.
“We look forward to exploring this topic further in our next survey in November”, she added.
Additionally, advisers’ preparedness for the consumer duty was also examined in the survey, finding that 4 per cent of advisers have not yet started to prepare for consumer duty, which is due to come into force from next month.
This was in contrast to the 19 per cent of respondents who said they were already fully prepared and the 77 per cent who stated that their preparations are in progress and that they should be ready by the end of July.
Client concerns
Schroders’s survey also examined concerns for advisers’ clients, the biggest of which was found to be capital loss, with 53 per cent of advisers saying their clients felt most strongly about this.
Clients remained least concerned about rising interest rates, with 32 per cent of respondents identifying this, which Schroders said may be due to the fact that “many advisers’ clients are at the stage of their lives when they will have paid off their mortgage”.
While this was found to be clients' lowest concern, it represented an increase on the 18 per cent recorded in November 2022.
Schroders also looked at how market turbulence had affected clients, reporting that 89 per cent of advisers have clients who adjusted their plans as a result of the cost-of-living crisis, an increase on the 53 per cent recorded in November 2022.
The reasons for adjustments were also examined with up to 60 per cent of advisers’ clients citing higher household expenses as a reason for changing their plans, and 44 per cent citing having to help their wider family.
tom.dunstan@ft.com
