UK trade body Personal Investment Management & Financial Advice Association (Pimfa) is warning advice firms and wealth managers not to be “Consumer Duty Zombies” as it marks 28 days until the deadline to comply with the new regulatory regime.
While a majority of firms have heeded the Financial Conduct Authority’s (FCA) advice that the Consumer Duty represents “a watershed moment” that they should take seriously, there may still be a few firms that have yet to act.
As has been warned before, the FCA’s expectation is for a cultural shift where the firm’s mindset and all product lines are aligned to deliver good outcomes for consumers. Existing product governance, code of conduct frameworks, and vulnerable customer strategies can provide a foundation for firms to build on to meet the requirements of the duty.
Alexandra Roberts, head of regulatory policy and compliance at Pimfa, said: “With just 28 days to go until the Consumer Duty comes into force it really is time for firms to make sure they are ready, or at the very least, on course to be ready by 31 July.
“Firms have been warned before, but it bears repeating that the Consumer Duty is not just an extension of Treating Customers Fairly. The Consumer Duty will bring about fundamental changes to the way in which firms are supervised and regulated and requires a cultural shift in attitudes.
“If any firms still need help there are lots and lots of resources on the Pimfa website but the team and our associate members are also happy to help so please use the information and resources available to ensure you meet the deadline.”
10 recommendations
In other news, pension firm Aegon has produced a set of 10 recommendations specifically for advisers around the FCA’s Consumer Duty.
Aegon’s 10 recommendations are as follows:
- Evidence delivery of implementation plan;
- Review the FCA’s 39 example questions;
- Document your target markets and segmentation;
- Finalise value assessments;
- Check your Management Information (MI) against the FCA’s suggestions list;
- Formalise your approach to vulnerable customers;
- Review your customer feedback;
- Read the latest FCA material;
- Keep prioritising; and
- Get your records in order.
Steven Cameron, pensions director at Aegon, added: “With the FCA’s Consumer Duty July deadline fast approaching, and with so much material provided by the FCA, it can be hard to see the wood for the trees.
“The Consumer Duty further reinforces the need for providers like Aegon to collaborate with advisers. Building on the many adviser discussions we’re having, we have a number of recommendations to make.
“In this final stretch, advisers will want to make sure they have all the necessary evidence in place. I’d recommend documenting not just what changes you’ve made, but also where you’ve considered an aspect of your business and why you concluded it already meets the duty requirements. It would also be helpful to have a formalised record of how you identify and adapt your services where customers have characteristics of vulnerability.
“Once the duty is live, the FCA is likely to take a particular interest in adviser value assessments, target markets and approaches towards segmenting clients. All of this should be documented and reviewed on an ongoing basis.”
