Consumer dutyMar 13 2023

FCA support on consumer duty 'not very helpful'

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FCA support on consumer duty 'not very helpful'
Derek Bradley, chief executive and founder of Panacea Adviser, says FCA has not been very supportive over Consumer Duty. (Derek Bradley)

The regulator's support for advisers on consumer duty has not been helpful or easy to understand, Panacea Adviser has claimed. 

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.