In Your Shoes New Consumer Duties
Published / Last Updated on 14/12/2021
The Financial Conduct Authority has issued draft guidance for new rules that all financial services firms including financial advisers will be required to adopt in their business practices and culture.
It is called “Consumer Duties”.
Adviser must empathise with clients i.e. put ourselves in the client's shoes/client position. Is the product or service right for the consumer ‘in the consumer’s eyes’?
Good Consumer Outcomes – 4 Key Areas
- Governance of products and services (is the financial business being run with the right approach for consumer ethics and employee welfare too)
- Price and value – is the value charge a fair reflection of costs for works and time involved as well the liability taken on
- Consumer Understanding – what is the client’s knowledge and experience of finance, should they really have that expensive, complex product if they have little understanding?
- Consumer Support – what is both initial and ongoing support for the client? Is the financial adviser ensuring continued support and access to support for their client?
We believe the above is essential to the financial well being of our clients as well as building up trust between each other.
The new duties will hopefully ensure that consumers are not given products or services that are not in their best interests when they are clearly paying their adviser and placing trust in their adviser to do so.
The onus is on us, as a finance industry to ensure that the “Client Comes First”. We believe that many good financial services firms will already do this as part of their corporate make-up and these new obligations (and indeed liabilities) will weed out the rogues or help make it easier for the FCA to spot the rogues.
We welcome the new consumer duties and will look even harder at where we can improve all our products and services.
