Two in five (40 per cent) advisers expect to make more protection recommendations as a result of the consumer duty, research conducted by Guardian has revealed.
The research, which surveyed nearly 800 advisers, found that 58 per cent of respondents expect to make the same number of protection recommendations, with only a small minority (1 per cent) saying they expect to make less.
This positive sentiment was also reflected in the “overwhelming” majority view that the regulation would result in a move by advisers towards value-led protection recommendations.
Guardian found that 84 per cent of respondents agreed that, with the consumer duty’s emphasis on fair value, the portals and associated product analysis services will become a more important part of the selection process.
It was also found that 83 per cent expect the duty to improve consumer experience of protection and 81 per cent said it will result in more advisers focusing in quality over price when selling protection.
Guardian marketing and proposition director, Jacqui Gillies, said: “The fact that over 40 per cent of advisers said they expect consumer duty to lead to them making more recommendations will mean more customers getting the protection they need.
“It’s also encouraging to know that advisers are taking the duty seriously and making changes to their businesses where they feel they have potential to further improve outcomes for consumers."
Impact of consumer duty
The research also asked advisers about how consumer duty was impacting their own businesses and what changes, if any, they were making to comply.
Some 62 per cent of respondents said it was having some degree of impact, with 49 per cent stating it was having “some” or “reasonable” impact, and a further 13 per cent stating the impact was “big” or “very big”.
When asked to rank which of the outcomes or cross cutting rules was having the biggest impact in terms of the changes being made to their firm, the 442 advisers who answered this question ranked consumer understanding as number one.
This was followed by price and value, products and services, customer support, firms should act in good faith, and firms should avoid foreseeable harm.
The bottom of the list in terms of changes being made was “firms should help consumers achieve their financial objectives”.
It was additionally revealed that 35 per cent of advisers said they had made significant changes to their website.
Advisers were also asked whether across the market, providers communication to date was clear and useful enough to equip them to comply with the duty, with 89 per cent of them answering yes.
Cavendish Ware director of strategic partners, Roy Mcloughlin, saidd: “Whenever new regulation comes along, the workload and costs associated with the changes are often well documented."
Mcloughlin also stated that the majority of advice firms agree that consumer duty will lead to an improved consumer experience of protection, and also for many, an expectation that they will make more protection recommendations.
tom.dunstan@ft.com
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