The Financial Conduct Authority's consumer duty allows the regulator to wrap up “unfinished business”, according to one of the guests on the latest FTAdviser podcast.
It is 10 years since the Retail Distribution Review came into effect, which was seen as one of the biggest changes to the advice profession.
Over the past decade, there has been a rise in adviser professionalism, increasing transparency on fees and a strong focus on consumer outcomes.
But now the Financial Conduct Authority has launched the new consumer duty as another regulation that could be set to transform the industry further.
Appearing on the FTAdviser podcast, Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute, said: “The consumer duty is one of several waves of regulatory attention on aspects of the RDR that the FCA feels is unfinished business.
“I don't think there's any doubt about that at all. There has been a massive improvement in professionalism as a huge cohort of advisers just decided to take it upon themselves to become more technically proficient, develop their soft skills, develop their client focus and there was a huge increase in professionalism even before RDR came in officially.
“For the FCA, there's some unfinished business around, for example, ongoing fees. RDR allowed people to collect ongoing fees as a percentage and it's inevitable that the FCA is going to want to keep an eye on that and make sure that people really understand how much they're paying and what they're getting in return.”
Challenges with the duty
Joining Connell on the podcast were Alexandra Roberts, head of regulatory policy and compliance at Pimfa and Andrew Green, head of compliance helpdesk at Threesixty Services.
Green said at the moment, Threesixty are dealing with lots of clients who are working their way through their implementation plan.
“They're looking at how they can achieve all of the four outcomes from that proposition,” he said.
“One of the key aspects that firms are looking at is when they're manufacturing their own service in terms of providing an ongoing service to their clients, what that looks like, and then the fair value assessment that sits behind the ongoing service."