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Guide to the consumer dutyThe breadth of the duty will also see co-operation between manufacturers and distributors, with providers required to make “all appropriate information” available to advisers so they can:
Meanwhile, distributors must share information to support manufacturers’ reviews when asked, which could be via a focus group or by completing a survey, for example. Advisers could be asked questions such as whether there are any issues regarding vulnerable customers and sales outside the target market.
“Under the consumer duty rules, special attention needs to be paid to the target market the product is aimed at,” says Vince Smith-Hughes, director of specialist business support at M&G Wealth.
“For us, [this] usually means the clients of an adviser, hence the importance of us getting feedback from advisers themselves.”
On the other hand, some advisers are expecting support from providers.
From general guidance on the changes to updated client literature, an April survey of 200 advisers found that two in five (42 per cent) said they would look to providers for help in preparing for the duty, according to research from Royal London.
Indeed, some providers have created resources to support advisers on the duty, such as:
But for most advice firms, implementing the duty will be an extension of the good practices they already have in place, says Sanderson at Morningstar Wealth Platform.
“Despite what has been said in other quarters, this is not the Retail Distribution Review 2.0.
So in that sense it is evolution rather than revolution, but still needs to be taken seriously, and the support of platforms and other third-party suppliers will be critical to this.”
Chloe Cheung is a senior features writer at FTAdviser