The industry should seek to support as many people as possible at all stages of the journey, not least in these turbulent times. This means the advice community working together to close the advice gap by making good quality advice much more accessible to the wider population.
In other words, reaching those that could benefit most from advice but are currently unable and/or unwilling to engage.
The barriers to achieving this are lowering all the time, due to the ongoing development of digital services, from hybrid advice models and guided journeys to the front- and back-office technology that can drive costs down and enable the industry to offer affordable advice at scale.
As the FCA has said, there is “significant scope” for technology to help companies reduce costs and make advice more affordable. It referred to one company’s estimate that “used properly”, technology could reduce the time taken to prepare an ongoing review from six hours to just 45 minutes.
A duty to step up
It is worth thinking about the new consumer duty in this context. For instance, the ‘consumer understanding’ outcome emphasises the ability of companies’ communications “to support and enable consumers to make informed decisions about financial products and services”, as well as providing them with the information they need “at the right time, and presented in a way they can understand”.
The ‘consumer support’ outcome has a particularly direct relevance to long-term savings, with the focus on enabling consumers to realise the benefits of the products and services they buy, pursue their financial objectives and ensure they can act in their own interests.
While providers have made big strides in the quality of communications and support, further progress is required if the industry is to reach the millions that are auto-enrolled but disengaged, bridge the advice gap and support consumers through difficult times.
Scale will become increasingly important in enabling companies to make greater investment in technology and create more opportunities for consumers around price, product and services.
A decade after AE revolutionised the workplace savings market and the RDR reshaped the advice sector, the industry still has to raise its game when it comes to meeting the needs of its customers. The consumer duty might just be the timely nudge that is required.
Alex Kovach is chief commercial officer at Nucleus