Consumer Duty fair value prompts 37% of adviser firms to change their fee structure
Royal London, the UK’s largest life, pensions and investment mutual, along with research partner, the lang cat, has found 37% of adviser firms have changed their fee structure as a result of completing the Consumer Duty fair value exercise.
21% of those asked found the changes needed were difficult and a lot of work was needed to comply, with a small number (3%) still to make the required changes.
Encouragingly, the research shows the Consumer Duty overall to be a positive change with over two thirds (67%) of the respondents agreeing the work needed to carry out the fair value assessments has been worthwhile.
The research has also highlighted that only 20% of adviser firms have issued updates to their clients about the Consumer Duty, and more specifically on fair value, 39% of adviser firms haven’t mentioned it at all, and 41% have only mentioned it when prompted by their clients.
Jamie Jenkins, Director of Policy at Royal London, said: "The Consumer Duty has prompted a great deal of activity from all areas of the financial services industry and, while this may have initially seemed onerous, it’s clear that it is making a difference to how firms operate in the interests of clients and customers. Financial advisers are closer to their clients than anyone else in the value chain, so they are very well placed to understand the changes needed to deliver good outcomes.”
Mike Barrett, Consulting Director at the lang cat, added: "If you believed the noise, you might conclude that advisers believe Consumer Duty is a waste of time. Reassuringly, our research shows a more positive sentiment, which, I think, reflects the advice sector’s transformation from an industry into a profession.
"Yes, there has been work to do to facilitate this transformation, however the intentions for Consumer Duty are hard to argue against. If the regulator can evidence proactive supervision, driving change and taking enforcement action where necessary, as well as helping advice firms understand best practice, we believe this positive sentiment can improve further."
Notes to editor
About the research
The adviser research was conducted with the lang cat’s 1300+ strong Adviser Research Panel during September 2023. 160 responses were received. 69% of respondents described themselves as either a financial adviser or financial planner. The remaining respondents were split across paraplanning, administration and compliance roles. 72% of respondents are part of a directly authorised firm, with a further 16% being network members.
About the lang cat
The lang cat is a specialist financial services consultancy and communications agency that works with financial advisers and providers, helping them develop new propositions, turn marketing strategy into action and articulate their services in such a way that people without financial services degrees have a hope of understanding them. It aims to make the industry a little bit less corporate and stuffy and a little bit more human.
For further information please contact:
Patricia Corrigan, PR Manager
About Royal London
Royal London is the largest mutual life, pensions and investment company in the UK, and in the top 25 mutuals globally, with assets under management of £153 billion, 8.6 million policies in force and over 4,100 employees. Figures quoted are as at 30 June 2023. Learn more at royallondon.com.
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