In line with the Financial Conduct Authority’s (FCA) regulatory reform, the Consumer Duty, the Personal Finance Society (PFS) has published a good practice guide for personal finance firms.
According to the PFS, there are not many rules under the Consumer Duty, but instead it has four outcomes from which firms should judge their impact on customers. The outcomes are:
- Price and value
- Consumer understanding
- Products and service – ensuring that products are designed properly for their target market
- Consumer support – for example, ensuring that customers making a claim do not face unnecessary barriers
“In many ways, financial advisers have been at the forefront of care for their clients – there is no greater discipline for a professional than sitting in front of a client for an annual review and explaining how their investments have performed,” said PFS director of policy and public affairs Dr Matthew Connell.
Connell added that the Consumer Duty recognises the unique position advisers have in assessing value for their clients, noting that the regulation has stated that “the adviser can often also have the clearest oversight of the customer’s overall position and an overview of the total proposition.”
“Our good practice guide sets out the regulator’s expectations, and is designed to start a conversation about how advisers can discharge the Consumer Duty in a practical and achievable way,” the director said.
