Scottish Widows’ latest Investor Confidence Barometer included encouraging news for the financial planning sector. One of the report’s findings was that over four in five people (82%) with a financial adviser believe it represents ‘value for money’ – up 10% since November 2023. This rise in the perceived value of advice post-Consumer Duty is a great foundation for us all to build on in 2025 and beyond.
The Lang Cat also published positive findings that Consumer Duty is having a major influence on advice practice. Data from its Analyser MPS software, which assesses all MPS due diligence reports from the past 12 months, shows that advisers are selecting mainly on target market, product design and client suitability, rather than cost.
Consumer Duty was also prominent in a letter from the FCA’s CEO to the Prime Minister, Chancellor, and Secretary of State, setting out regulatory reforms to boost the economy, in addition to those already planned for 2025:
- Simplifying or removing some of its handbook’s rules.
- Working closely with the Bank of England and the Prudential Regulatory Authority to reduce reporting burdens for firms.
- Making the Senior Managers and Certification Regime more flexible.
New proposals to reduce the regulatory burden include:
- Removing the need for a Consumer Duty board champion.
- Ensuring future consultations on consumer protection ask if the Consumer Duty is sufficient, rather than adding new rules.
- Begin simplifying lending advice rules for mortgages and opening a discussion “on the balance between access to lending and levels of defaults.”
- Reviewing the proportionality of reporting requirements and removing ‘redundant returns’, expected to benefit 16,000 regulated firms.
Removing the role of the Consumer Duty board champion received a mixed reaction but, given the positive change in the FCA’s approach that we saw last year and statements acknowledging the importance of proportionality, I wasn’t particularly surprised at the announcement. It’s a reflection of the fact that the regulation has been in effect for the best part of eighteen months, and every member of the team has a responsibility under the Duty, not limited to a single Champion or those in compliance roles.
The CDA has been actively engaged with the FCA during January, and I’m pleased to confirm that we will be building a wider programme for 2025 based on the success of our inaugural ‘Evolution of Financial Planning’ event last October. Watch out for further information.
Finally, the Alliance is delighted to announce the appointment of a new Head of Engagement, Emma Bull. Emma has worked in key roles in major financial adviser businesses for nearly 20 years and her role includes helping to raise the CDA’s profile of as an independent voice for the retail personal finance sector and developing the way that we engage our Members, Affiliates, the FCA, Government and various stakeholders.
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To be recognised as a true profession - united as an Alliance we evolve!
Very best wishes,
Keith Richards, CEO, Consumer Duty Alliance and Chairman, Financial Vulnerability Taskforce
