As the Consumer Duty deadline rapidly approaches, Nick Hall, Business Development Director, Wealth Wizards, shares his insights on how progressive firms will take the lead in the market.
With the Consumer Duty deadline now imminent, it is expected that all financial advice firms will either be fully prepared or in the final stages of complying with the new rules.
However, it is crucial for firms to look beyond the 31 July deadline and consider not only how they ensure compliance with Consumer Duty but also how it positions them in the market.
The FCA sees Consumer Duty as more than just a means of aligning the market with its customer-centric approach; it also aims to stimulate innovation and competition. This objective aligns with the Regulator’s ambition of enabling more UK consumers to access financial advice.
We identify three clear business benefits of the Consumer Duty:
• increased trust in financial advice resulting from the rules
• heightened visibility of advice (in line with the regulator’s goal of expanding access to advice)
• and the business growth opportunities that arise as a result.
Forward-thinking firms, including major players, networks, and consolidators, who are focused on scaling up, will be seeking ways to capitalise on these advantages.
There are three key elements for growing advice businesses to both meet the Consumer Duty requirements and build for the future.
1. Consistency of process – ensuring compliance with the firm’s policies and maintaining alignment.
2. Consistency of delivery – ensuring that every client receives the same high level of service.
3. Efficient use of resources – maximising the value of your most valuable resource, your staff, to enhance the client experience and relationships.
Digital solutions can facilitate each of these elements.
Digital solutions enable engagement with clients, such as gathering relevant information through fact-finding, identifying their needs and goals, and providing advice and recommendations through suitability reports. The entire journey can be personalised for the client, aligning with the firm’s advice policies and remaining fully compliant.
By guiding clients through a digital journey, the level of service delivery can be consistent and tailored to their individual needs and goals. Technology can automate the heavy lifting of the advice process, such as digitising fact-finding, populating data entry fields, generating suitability reports, validating data, and providing automated fund recommendations where appropriate. It also ensures that clients fully comprehend the advice and recommendations offered.
This frees up advisers, paraplanners, and administrators to focus on the aspects of the advice process that truly add value for the client – how their relationship with the advice firm helps them meet their financial needs and achieve their goals.
Moreover, from a Consumer Duty perspective, everything can be automatically recorded as evidence of delivering positive outcomes.