Advisers say consumer support is biggest challenge

Financial advisers find ‘consumer support’ the most challenging Consumer Duty requirement, according to new research from Abrdn, an investment and SIPP provider. The study has been published this week to mark six months since the FCA's new Consumer Duty rules were introduced. Consumer support covers providing services in a way that meet clients’ needs. Some 44% of advisers said it was the most challenging of the Consumer Duty regulations. Second was ‘consumer understanding’ at 39%. It requires advisers to provide information in the right way, at the right time in a clear way, while demonstrating that clients are understanding. Third at 37% was ‘products and services’ – which covers designing advice services to meet clients’ needs and ensuring appropriate targeting. 'Price and value' – ensuring clients receive fair value on the services provided – was cited a close second as the most challenging requirement for direct authorised firms but dropped to last when looked at across all firms. Directly authorised firms reported the most issues with price and value at 46% while firms with restricted authorisation were at just 22%. Alastair Black, head of savings policy at Abrdn, said: “While we may have expected to see one area of Consumer Duty stand out more as being an area of focus, our research shows that, on the whole, adviser firms are as likely to be working on any of the four outcomes. “To me, this highlights the fact that every firm is dealing with a slightly different set of challenges. But it also indicates that there are many businesses that have developed a strategy for success.” Looking ahead, firms are prioritising improving how they capture client feedback, management information and reviewing customer communications to support ongoing compliance. Advisers are most focused on improving how they gather client feedback (19%), improving or introducing new systems to capture management information (18%) and reviewing customer communications (18%). Just over one in six (17%) were also starting to use, or increasing the use of, an outsourced Managed Portfolio Service (MPS). Mr Black added: “A key takeaway from this research is that everyone is prioritising something to help maintain their compliance.” • The research was based on a survey of 300 UK financial advisers, including 63 at directly authorised businesses, 60 at restricted and 60 at networked firms, regulated to give Financial Planning advice on long-term savings like pensions and ISAs, conducted by Censuswide on behalf of Abrdn in January 2024.

Advisers say consumer support is biggest challenge

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