Most of us have heard of military duty, those of a certain age recall customs duty – now back with a vengeance - but what is Consumer Duty?
I thought it worthy of a post on the basis that if you’ve not heard about it already, you soon will and that you should be pleased that you do.
What is Consumer Duty?
The Consumer Duty is the latest regulatory elevation in service of improving outcomes for people receiving financial advice or financial planning by re-framing the responsibilities and obligations of advisers around principles – products and services, price and value, consumer understanding and consumer support. From this, goes the logic, even better outcomes will follow.
So far, so obvious, you may think. Aren’t all financial planners supposed to put their clients first?
Of course they are and we are proud to have always done so. What the Consumer Duty does is to wipe the window more thoroughly to make it far more transparent for clients to understand their transaction at every stage.
For example, talking or communicating with someone without using jargon is an approach which few will argue with but it goes further by asking financial advisers to consider carefully if someone is vulnerable, suffering from poor health or going through a difficult time and to adjust the conversation accordingly.
Again, these are considerations our Chartered financial planning team will always take into account (it’s one of the “going above and beyond” reasons for being awarded Chartered status) so we welcome their wider adoption.
Without wanting to rain on my own parade, you may be wondering what it means to you and why you should read on.
One good reason is the looming deadline for firms like ours offering regulated financial planning or financial advice to have incorporated the new Consumer Duty by the deadline of July 31st.
Clearly, it’s something important to all of us who work in the sector and the vast majority of companies have been busily adopting its new tenets.
And this means it’s a valuable new box to tick if you’re comparing financial planners. Asking them for evidence of complying with the Consumer Duty is another worthwhile step towards making sure they really are putting you first.
A final point worth bearing in mind is that there is no form-filling – see customs duty – or a paper-based, assault-course. Just a stated acknowledgement that one of the questions you need to ask before engaging an adviser will provide a helpful black and white answer on the service you are, well, duty-bound to receive.