All advisers should ensure they are “well-advanced” on their journey towards compliance with Consumer Duty, according to Branko Bjelobaba, principal at consultancy Branko.
Speaking to Health & Protection on the morning the Financial Conduct Authority (FCA) Consumer Duty comes into force, Bjelobaba said while he could not imagine everything will have been done for today.
He added that neither did the FCA expect that, but everyone should be “well-advanced” on their journey toward compliance with the new rules.
The compliance consultant highlighted that at the last event he attended he asked advisers to give him one word describing what the new rules meant to them.
Words suggested included responsibility, outcomes, fairness, improvements, transparency, clarity, trust and value.
“I like these a lot and they do sum up what it’s all about,” Bjelobaba continued.
But he warned: “Last week, we saw the FCA Financial Lives survey and that said that over half of UK adults had no confidence in us and just 36% agreed that firms were honest and transparent in the way they treat them.
“There’s clearly a lot of work to do for some firms.”
Expanding the scope of vulnerabilities to consider
Commenting on the same survey, Andrew Gething, managing director of MorganAsh, said it demonstrated just how important the new regulation is.
“Without a consistent approach to identify, monitor and evidence vulnerability, it will be impossible for firms to ensure they are delivering good outcomes or meeting the new rules,” Gething continued.
“Complacency has long been a challenge for Consumer Duty, with firms believing they already meet its requirements.
“In reality, the new rules expand the scope of vulnerabilities firms must now consider and the actions they must take. It also expands the monitoring requirement considerably to cover the lifetime of the product.”
He added: “While there may be firms still with work to do and attitudes still to change, those that have embraced Consumer Duty are already understanding the competitive advantage it can provide.”
Surpassing expectations
Socrates Mhlanga, chief risk officer at The Exeter, echoed those sentiments – claiming Consumer Duty provides the industry with a chance to “further surpass expectations and establish new standards in customer service and product development”.
“However, meeting regulatory requirements is not a one-time event,” Mhlanga added.
“We must be prepared to continuously review customer outcomes and ensure we offer the best solutions to meet the needs of UK workers and their families in both the short and long term.”