Advisers unsure how to advise clients on consumer duty

Research by Opinium, which surveyed 200 IFAs between May and July, found that 61 per cent said they are somewhat clear about what good customer outcomes look like, while 25 per cent are very clear.

However, 70 per cent of advisers think the Financial Conduct Authority has been unclear in the lead up to the July 31 deadline - when the new regulations will come into force. 

With the FCA warning it will act faster and more assertively where firms fail to meet the requirements of the duty, nearly half of advisers were concerned about potential complaints and penalties for not meeting the new rules. 

Alexa Nightingale, head of financial services research at Opinium, said: “With the deadline approaching in a week’s time, it’s worrying that 15 per cent of IFAs don’t feel clear about advising clients on what good customer outcomes look like, with a more substantial number being concerned about the potential ramifications they could face.

“Feedback on the FCA’s role has not been glowing so far, so it will be interesting to see how the first few weeks of the Duty play out, and whether the FCA can paint itself in a more positive light among the adviser community.”

Opinium also surveyed UK adults about their understanding of consumer duty, finding that 72 per cent had never heard of it.

However, 50 per cent of those who receive financial advice had heard of it.

The study comes as research by Quilter, gathered by Boring Money, found almost a third of financial advisers expect their customer fees to increase as a result of the regulations. 

The duty mean that consumers should get communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.

tara.o'connor@ft.com

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