With the 31st October Consumer Duty deadline approaching, Warren Vickers, Managing Director at Tenet Compliance Services, says there’s a real risk of complacency, as well as other dangers:
“The regulator may have heeded calls for a more reasonable Consumer Duty implementation timeframe, but the grit in the oyster is the 31st October deadline for all firms to have their implementation plans in place.
“Plans need to be properly documented and made available on the regulator’s request. However, without the impetus of having to make a submission, it’s likely many advisers will let the deadline slip by and leave themselves open to both not meeting the broader implementation deadline and regulatory scrutiny.
“It’s true that many advisers will already be operating in line with the Duty’s broad aims but that brings with it the misconception that nothing needs to change. Expectations are increasing and compliance with existing standards alone won’t be enough.
“Furthermore, advice firms are under a lot of pressure to allocate resources towards the new Consumer Duty standards. With estimated implementation costs ranging up to £26k, there’s a danger that risk management attention will simply get rerouted to Consumer Duty issues, leaving other compliance risks to fall by the wayside.
“This will be a difficult balancing act for smaller firms, but advisers can’t afford to kick the can down the road. A structured, step-by-step approach is key to managing regulatory change, and any advisers who don’t already have Consumer Duty implementation plans in place should begin with a gap analysis to benchmark their current operations and better pinpoint the steps they need to take to meet these new obligations.”
