Advisers have changed their servicing approach as Consumer Duty hits first anniversary

Royal London, the UK’s largest life, pensions, and investment mutual, has found over two-fifths (43%) of advisers changed their client servicing approach as a result of Consumer Duty.

The findings from Royal London’s biannual adviser survey, where 528 respondents were questioned about the impact of Consumer Duty on their business, also show 43% have changed their approach when dealing with vulnerable customers.

Other key changes in services in the past year include 27% of advisers saying they have increased the frequency of client feedback requests, while 15% have reduced the number of clients on their books and 13% have changed investment approach. Around one in ten of advisers (13%) said their firm had changed nothing as a result of Consumer Duty.

When asked to what extent they felt Consumer Duty had met its intended objectives in the market as a whole, there is mostly positive sentiment with 52% saying it has met or exceeded its objectives. However, one in five advisers (23%) don’t think it has met its objectives, and a quarter of respondents aren’t sure.

Jamie Jenkins, Director of Policy at Royal London, said:

"With the first anniversary of Consumer Duty approaching, it’s interesting to get a snapshot of the impact on adviser businesses and overall perception of whether it has been a success.

"Generally, the change feels positive among most respondents though we can’t ignore the 23% of advisers who don’t think it has met its objectives. It’s a difficult one to speculate on, but we do know of adviser firms who felt they were already meeting the requirements so perhaps some don’t think the change in regulation is relevant to them.

"The advisers we speak to are, overall, very supportive of the Consumer Duty and what the regulator is trying to achieve in delivering good outcomes for clients. And advisers are clearly very well placed to understand this better than anyone else in the value chain.

"The Consumer Duty is arguably the most significant piece of regulation we have seen for nearly 20 years, seeking to make a cultural shift for the whole industry from simply treating customers fairly, to treating them well. It has undoubtedly led to changes in the market already, and if it hits its mark, it will significantly improve trust in financial services."