"Six months on from Consumer Duty being brought in, the IFA polling shows there is some work to be done in terms of how supported firms feel in implementing the new rules."
- Alexa Nightingale, head of financial services research at Opinium
The FCA's new guidelines on Consumer Duty came into force on July 31st, setting higher standards of consumer protection in the financial services sector.
The guidelines mandate that financial services put their customers first and take measures to enable and support customers to pursue final objectives. Despite this, new research from Opinium has found that close to a third of consumers who have heard of Consumer Duty feel they had received less clear financial advice in the last six months.
The research also highlighted that 45% of IFAs feel the new rules have made it harder to give clients advice, with 72% saying they’ve seen an increase in admin and reporting duties, and 61% saying they now have less time to advise clients.
In addition, 16% of advisers remain unclear on what constitutes good customer outcomes.
Alexa Nightingale, head of financial services research at Opinium, said: “Six months on from Consumer Duty being brought in, the IFA polling shows there is some work to be done in terms of how supported firms feel in implementing the new rules. As with any major change in regulation, it’s not surprising there are initial teething problems, and these currently seem to be extending to the consumer experience – which Consumer Duty was brought in to improve.
“It appears there is more that could be done by the regulator to help support firms. However, if IFAs and their businesses are able to share their learnings and knowledge externally, the lack of certainty also presents an opportunity for sharing that could benefit the whole industry.”
Zahra Hassan, co-founder of Eligible, commented: "AI has the power to transform customer support from a reactive relationship to a proactive one. Instead of banks providing support only when the customer asks for it, AI can detect those who are likely to need assistance and proactively engage with them, fostering education and active dialogue.
“What AI can do today is interact with customers and measure the level of understanding of their existing product before providing bespoke financial expertise. Based on this, we can start to form views on the likelihood that they could struggle to meet their payments."
