Consumer Duty is two years old. If the time seems to have gone as quickly to you as it does to me, it might be because of the amount of change over that time – in the government, in the geopolitical landscape, and in technology, with a generational shift in the form of the rise of AI.
With the government’s growth agenda feeding through and the desired impact on firms’ culture and conduct bedding in, some of the formality around meeting the Duty may be retracted. However, the principle remains at the heart of the regulatory agenda. Chris Jones, Financial Services Director, Dynamic Planner, provides his expert insights.
In the run up to implementation, and over the last two years, advice firms have put huge quantities of time and effort into meeting the requirements. And attitudes have shifted, so that over half of advisers (52%) now view Consumer Duty as having had a positive impact on their business, according to the FCA – up from 45% in 2024.
Many have grasped the opportunities, while some have been more cautious. But wherever you sit, Consumer Duty has become part of the conversation up and down the value chain.
As a technology provider, we’ve been at the heart of that conversation – and we can also see how our customers have responded to the Duty with our software. Through that lens, this series looks back to assess how far we’ve come over the last two years, and forwards to see what happens next.
We’ll do that outcome by outcome, starting with Products and Services.
Built on PROD
The first outcome of Consumer Duty requires products and services to be designed to meet the needs, characteristics and objectives of a target group of customers, and distributed appropriately. Firms should carry out reviews to that effect and ensure products and services avoid foreseeable harm.
This part of Consumer Duty, in essence, tells you to follow the PROD rules. After the Retail Distribution Review, there was a period in which, whether you were independent, tied or later restricted, you were probably operating with your favourite solution or panel of solutions. But MiFID and then PROD changed the picture, requiring you, if you’re an IFA, to document your selection criteria and make sure your selected product or solution meets the need of your target market.
That shift brought home the structural efficiencies and client benefits of an approach that thinks about groups of people and what’s best for them. Combine it with an adviser who applies that best practice for the group to the individual client and their particular circumstances and it can be powerful.
Beyond PROD
So far, so PROD. Where Consumer Duty differs is to say you need to do the same for services: the service you provide must also be designed for the needs of your target market, reviewed regularly to make sure it meets those needs, and avoid foreseeable harm.
And products and services are integrated in this one pillar of the Duty, so it’s no longer about getting the ‘best’ or ‘cheapest’ product, but about the overall outcome the client achieves. That means plan is more important than product, service is at least as important as solution, and the transformation of your role from broker to true adviser, set in motion by RDR, is completed.
Technology as enabler
The financial advice service model used to be one size fits all. At best, you had your bronze, silver and gold tiers. That made sense because firms had to control it, evidence it and document it. When it was all paper, and even when it became emails and spreadsheets, the best way to do that was with one consistent approach to everything.
Today, technology is an enabler for a proliferation of service models, providing a framework for you to deliver on this outcome of the Duty by serving different groups in the ways that best suit them, all with robust controls and evidencing.
You might service a younger client with simpler planning needs primarily through your app. For a client closer to retirement, with more complex circumstances and wealth held in different places, you might do more face to face – still supported by your technology. We can now see the foundations of Consumer Duty enabling the implementation of the Advice Guidance Boundary Review to be more relevant for advice firms – and less prescriptive than expected.
Target markets as foundation
Getting your technology working for you in this way starts with setting up your target markets. Dynamic Planner’s Advice 2025 survey found 43% of advice firms have grouped clients into target markets since Consumer Duty implementation. The number of recommendations linked to target markets defined in our system has risen by 146% since August 2023.
If you’re not doing it yet, it can be transformative – for your ability to meet this aspect of the Duty, and for your business.
Next month: Price and Value – an outcome that’s had lots of focus from firms, but what’s working and what else can you do to get it right?
