Financial advice firms are not sufficiently close to the upcoming Consumer Duty requirements, with just 13% saying they are familiar with the regulation and only 6% believing it will impact their business.
This is despite the regulation, due to be implemented by April next year, being directed at both manufacturers and distributors.
Research from NMG Consulting reveals that most believe the regulation will have more impact on product providers than their own businesses, and even then, most believe the impact will be moderate.
The Consumer Duty regulations encompass all the main areas influencing outcomes for retail customers: product and services, price and value, customer understanding and customer support.
Jane Craig, Partner at NMG said: “The research is a wake-up call for the advice industry. Further clarity is urgently required for advice firms to confidently embrace the new principles within their business or be assured that current practices are compliant. Advisers will need support over the coming months and much of this needs to come from product providers.
“Communications is just one area that providers need to review, to ensure that, for example, provider-generated comms materials used by advisers meet the new requirements around customer understanding. Advisers are already focused on good outcomes for clients, but there will be additional need for providers to help them evidence this across the advice process.
“Consumer Duty will have significant ramifications for the whole industry and despite the focus on product manufacturers, the effects will certainly be felt further down the chain.”
The FCA expects to publish finalised rules and guidance via a policy statement by 31 July 2022, with rules coming into effect in April 2023.
