One in seven (16%) independent financial advisers say they are still unclear on Consumer Duty good customer outcomes just over six months since the regulation was introduced.
Almost half (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.
These are the findings of global research and insights agency Opinium’s latest polling into the views of IFAs.
The survey found that increased admin time isn’t the only issue, despite advisers aiming to improve clarity for consumers.
Almost a third (30%) of consumers who had heard of Consumer Duty believe they’ve been provided with financial advice that was less clear in the past six months.
And 28% said they’d received an all-around less positive service from their financial service providers.
Awareness of Consumer Duty itself outside of the industry also remains low, with the majority (71%) of all UK consumers claiming they’ve never heard of it.
Despite these hurdles, two thirds (65%) of IFAs believe their businesses have successfully integrated the Consumer Duty principles.
Meanwhile, 60% of IFAs have acknowledge facing difficulties in meeting the FCA’s reporting requirements.
The FCA recently admitted that some firms are struggling to meet some of the outcomes of the Consumer Duty.
FCA’s executive director for consumers and competition Sheldon Mills said on Wednesday (21 Feb) that price and value are the most challenging outcome of the Consumer Duty for adviser firms to meet.
The regulator’s Consumer Duty came into force on 31 July 2023. It aims to set higher standards of consumer protection across all retail financial services.
Opinium head of financial services research, Alexa Nightingale, 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.”
