Two years after its introduction, Consumer Duty continues to reshape how firms engage with clients. In this instalment, Dynamic Planner’s Chris Jones explores the Consumer Understanding outcome—highlighting how technology, creative communication, and AI are helping advisers improve transparency, personalise interactions, and better support vulnerable clients.
From our privileged vantage point as a technology provider to the industry, informed by both our data and the many, many conversations I’ve had with our clients, I’m working through the four outcomes one by one.
This time, Consumer Understanding.
Communicating on services and fees
Over the last couple of months, looking at the Products and Services and Price and Value outcomes, I’ve talked about firms getting more precise about defining their service models and how they charge for them as a result of Consumer Duty – perhaps with different models and associated fee structures for different client groups.
There’s a clear overlap here with the Customer Understanding outcome. With that work of definition done, firms have also concentrated on making sure clients know exactly what they can expect: what they pay for the service they receive, what’s included in that fee, what else is available beyond the core service and at what additional cost.
If defining their services more tightly has been valuable for firms, the work on this aspect of understanding has been great for clients, markedly improving both transparency and comparability in a formerly murky area.
Creative focus with tech as the enabler
As I wrote last month, the Price and Value outcome was an obvious area of focus for firms in the run up to and after implementation – though sometimes with quite a blunt ‘just make everything cheaper’ approach.
Perhaps more surprising, and very encouraging, is the extent to which firms have poured time and energy into Consumer Understanding, looking again at all the ways they communicate with their customers and the extent to which those communications meet the customers’ needs.
That’s evident in a focus on the quality of reporting, with firms aiming to make their reports clear, beautiful, accessible and digestible – empowered by technology that massively streamlines the reporting process.
It’s also apparent in more creative ways. For example, firms are using behavioural psychology for insights into how people access and process information. Others are revisiting the communication channels they use, or adding client-facing apps such as Dynamic Planner’s Tram, which let customers engage with their financial plans on the sofa or on the move, at a time that suits them.
Firms are segmenting their clients and engaging with different groups in different ways, according to their age, preferences, vulnerability characteristics, behavioural biases and more. Digital factfinds with open questions to really draw out ‘soft facts’ such as client’s objectives are helping advisers to adjust the focus and nature of their communications, as well as making the client feel heard
Again, tech is the enabler, allowing comms to be tailored and personalised quickly and efficiently and routed through different channels, with everything tracked and evidenced.
Of course, all of this benefits not only the clients themselves but the firm. Advisers need their clients to engage with and understand the process so they will take action. Better-informed clients mean deeper relationships, improved retention and, ultimately, stronger outcomes.
Supporting vulnerable clients
The Consumer Understanding outcome of the Duty includes a specific mention of the need to tailor communications to vulnerable customers.. Encouragingly, many firms are taking this seriously: Dynamic Planner’s financial wellbeing questionnaire, launched in June 2023 to help advisers identify characteristics of vulnerability, has now been used to profile over 12,000 clients.
However, there’s still work to be done in this area. The FCA’s March 2025 review of firms’ treatment of customers in vulnerable circumstances found some examples of good practice, but also ongoing challenges, particularly for consumers with multiple characteristics of vulnerability.
On the Consumer Understanding front, the FCA particularly emphasises the need to use appropriate communication channels and communicate clearly – which of course starts with the need to know your clients. If you’re not already using a wellbeing questionnaire, ideally one that uses a psychometric approach to capture the more subjective aspects of vulnerability, it might be time to start.
Harnessing AI to support understanding
Since last month’s column, we’ve had further evidence of the FCA’s commitment to leaning on Consumer Duty as the bedrock of the regulatory environment, as opposed to introducing successive waves of additional regulation. In its statement on its approach to artificial intelligence, the regulator says existing regulation, including Consumer Duty, mitigates many of the risks.
From a Consumer Understanding perspective specifically, the FCA points to the need to communicate in a way that meets the information needs of customers – meaning you can use AI to support the comms load, as long as doing so helps your clients to make informed decisions. Fair enough.
What might that look like? Initial AI use cases include summarising information for advisers and clients both before and after meetings, to support better conversations and deeper understanding. Beyond that, there are endless opportunities for firms to combine their data with the hyperpersonalisation capacities of AI to meet and surpass the regulator’s expectations on this aspect of the Duty.
Next month, we end the series by talking about the Consumer Support outcome – a pillar that was squarely in the crosshairs in the wake of implementation with the FCA’s focus on ongoing advice.
If you wanted to read Chris’s first instalment of Consumer Duty two years on, then you can find this on our website: https://ifamagazine.com/price-and-value-two-years-on-from-consumer-duty-chris-jones-dynamic-planner/
