Stuart Wilson
At our recent Later Life Adviser Conference we were never more than a minute or two from a discussion or question about the Consumer Duty rules.
That is completely understandable, given we’re just weeks from the 31 July deadline, and it’s actually encouraging because it shows a level of interest, enthusiasm and commitment from firms/owners/advisers to getting this right.
There was a lot to discuss, of course. The Financial Conduct Authority had just published its ‘10 questions all firms should be asking themselves’, and I encourage everyone to go through them, collate your answers and work through a plan that delivers on them — if you haven’t done so already.
Go back to basics with language and service proposition
For me the Consumer Duty is an opportunity, particularly in a financial services landscape that, for Joe Public, is increasingly complicated and difficult to understand.
The later-life lending space is no different from any other in that regard, but there is perhaps an added requirement or incentive to get things right when we consider the demographic of our clients.
Incorrect picture
Here is a simple example of where firms could be leaving themselves open when it comes to the Consumer Duty, specifically in terms of communication and transparency about the service they offer to an older customer base.
There are still opportunities to put these things right
A quick look at a variety of adviser websites suggests that, when talking about products they have access to and offer, they provide a full, whole-of-later-life-market choice. Nothing wrong with that, of course. However, on the same page a number also suggest that they offer only products that meet the Equity Release Council product standards.
Now, with the best will in the world both these statements can’t be true, due to the simple fact that not all later-life products meet those standards.
It’s a contradiction in terms. You either offer whole-of-market or you offer only products that meet the standard.
Work through your customer journey as if you are the customer; walk in their shoes
Of course, there are still a few weeks left until the Consumer Duty deadline and these websites may be amended prior to the new rules; I sincerely hope they are. But those sorts of statement could paint an incorrect picture for a consumer, who is unlikely to understand what they actually mean.
I get why firms are doing this: they want to offer themselves up as practices that, at the same time, have access to all the products and have an extra layer of safety built in to those they recommend. But, as we know, it simply can’t be true.
The Consumer Duty is an opportunity, particularly in a financial services landscape that, for Joe Public, is increasingly complicated and difficult to understand
How might this fit with a Consumer Duty that puts a great deal of faith in transparency, communication, service and product choice, and in the positive outcomes these are supposed to deliver for consumers?
And the onus is completely on the authorised firm, with little or no consumer-facing element to it.
That feels to me like a sticky wicket for advice firms to be batting on, and it’s just one example of where action should be taken and where we need far greater clarity on the messages communicated to consumers.
There is still time, and therefore there are still opportunities to put these things right.
Those sorts of statement could paint an incorrect picture for a consumer
To reiterate: work through your customer journey as if you are the customer, walk in their shoes, question everything you would tell them, and go back to basics in terms of your language and service proposition.
I guarantee you will pick up on things you thought were completely understandable but, in the light of the Consumer Duty, seem less so. It’s what the FCA expects of you, and it’s what your customers deserve.
Stuart Wilson is chairman at Air Club
This article featured in the July/August 2023 edition of MS.
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