FCA support on consumer duty 'not very helpful'

Initial results from a survey of the advice forum's members suggest only 4 per cent of the 187 respondents so far believe the Financial Conduct Authority's guidance for them has been sufficient.

Although the survey is still open on the Panacea Adviser website, forum founder Derek Bradley said there was little useful support from the regulator, and even the much-promised support from providers has been lacking. 

Comments from respondents included concerns over a lack of clear examples over what consumer duty adherence would "look like", with others citing "too much jargon".

We have been working hard to ensure that firms across all sectors understand the Consumer Duty and its importance.FCA spokesperson

According to initial results from the survey, which closes at the end of this month, only 21 per cent believed providers have been offering proactive support to advisers. 

One comment said: "A mixed bag - some are, some aren't. Some have no idea.” 

Last week, Royal London pledged it would provide greater support to financial advisers to help with consumer duty implementation.

But a general lack of understanding around the new regulations may account for the 34 per cent of respondents to Panacea Adviser's survey who said they had not yet completed all the appropriate changes to their business to meet the July 31 deadline.

A further 65 per cent also responded by saying they do not believe clients will see the consumer duty in a positive light.

'Hitting the spot'

Bradley said: "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 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'."

But as far as Bradley is concerned, consumer duty was not really "hitting the spot", at least not yet. 

'Significantly more confident'

But the FCA said it had been working hard to help firms understand and comply with the incoming regulations.

A spokesperson said: "We have been working hard to ensure that firms across all sectors understand the Consumer Duty and its importance.

“We have spoken at over 50 industry and stakeholder events since the final Consumer Duty rules were published, and almost 9,000 people attended the webinars we held for different sectors, with attendees significantly more confident that they understood the Duty afterwards.

“Our consumer investment, pensions and asset management Consumer Duty webinar was attended by almost 3,000 people, with 70 per cent of attendees indicating that they were highly confident that they understood the requirements of the Duty."

The FCA also said it has written to firms with sector specific expectations on how they should implement the Duty and what its expect of them, and said it would be engaging further with firms across different sectors prior to the Duty coming into effect later this year.

A series of Live & Local survey events across the UK found that 60 per cent of people found the FCA's firm information pages, policy, and webinars useful.

The FCA has also produced a series of podcasts on the Consumer Duty and the FCA’s expectations of firms, which are available on it website.

Background

The comments come as senior industry figures spoke of the "immense opportunities" under consumer duty.

At an event last week in London, compliance consultancy Alpha told attendees: "Consumer duty is presenting an opportunity for advice firms to truly pivot their businesses and optimise their client-facing service provision."

During the same event, the Consumer Duty Alliance was unveiled. 

This new independent professional body for the finance sector aims to serve members' needs, engage with policymakers, promote best practice and share thought-leadership, and create a community that can focus on delivering for clients and supporting financial planning.

simoney.kyriakou@ft.com