Consumer Duty: An essential regulation left unaddressed by many advisers.
- 39% of financial advisers have not communicated Consumer Duty to their clients.
- Royal London’s report reveals a communication gap regarding Consumer Duty.
- Advisers find Consumer Duty positive, yet some remain non-communicative.
- Research by The Lang Cat highlights varied adviser approaches to Consumer Duty.
Consumer Duty, a critical regulation intended to ensure financial advisers act in the best interest of their clients, is surprisingly absent from discussions between over a third of advisers and their clients. This omission raises questions about the dissemination and uptake of pivotal regulatory changes within the industry.
Royal London’s 2024 Meaning of Value report, conducted by The Lang Cat, surveys 160 advisers from September to October 2024, and uncovers a concerning trend: a substantial 39% of advisers have not initiated conversations with their clients about Consumer Duty. This statistic highlights a significant gap in communication that could impact client trust and regulatory compliance.
The findings indicate that while 41% of advisers have engaged in discussions when prompted, and 20% have proactively issued updates on Consumer Duty, a notable portion remains silent. Given the importance of Consumer Duty in fostering transparency and ethical standards, this silence is concerning.
Interestingly, advisers who have addressed Consumer Duty generally perceive it as a beneficial change, despite the additional work required to meet new standards. This underscores the potential value of the regulation in enhancing client relations and service quality.
The research emphasises a varied approach among advisers towards Consumer Duty communication. Some embrace it as an opportunity to strengthen client connections, while others appear apprehensive or unprepared to discuss its implications. This divergence suggests a need for improved educational resources and support systems for advisers.
Addressing the communication gap on Consumer Duty is crucial for maintaining trust and professionalism in the financial advisory sector.
