Given we are less than a month away from the implementation of the Consumer Duty rules on the 31st July, it would be understandable if industry/firm/adviser views and approaches were already set in stone about what is required, and how to go about it.
However, talking to a lot of advisers and firms at our recent Later Life Adviser Conference about Consumer Duty I certainly believe that many are still open and flexible about how they approach these new rules going forward.
That, in itself, may not be a bad thing. Firstly, in saying the above I’m not suggesting that firms are leaving Consumer Duty to the last minute – far from it. That is not the case and indeed the vast majority have engaged with the new requirements over the last 12-18 months or so, have worked hard on it, and will continue to do so.
What I mean here is that Consumer Duty is a very forward-thinking regulatory approach because it is quite clearly not just about the here and now and being ready on the 31st July – although that of course matters – but it is also about a continuous focus on improvement and an ongoing commitment to customers.
That matters as much in the later life advice space, as it does in the transactional-focused advice areas particularly like mortgages and protection, because the expectation with Consumer Duty is that the client must be looked after, communicated with, reviewed, etc, regularly after the completion of any product or service.
And it matters because there is an expectation of not just value for money in terms of what advisers are paid for their advice at the point a product/service is completed, but also into the future. Value for money is not just for today, but also for tomorrow.
Now, this in itself presents a number of opportunities for all advisers, but specifically later life advisers while at the same providing an additional layer of security and protection against complaints.
So, for a start, Consumer Duty expects ongoing regular contact to be made, because as we know client circumstances and needs change over time, but also in an area where there is a high degree of focus on vulnerability, advisers should be touching base with clients to see where they are currently at vulnerability-wise.
You might also well argue that this is doubly important for a client base which is older, and which might be more prone to transient vulnerability, particularly during financially tough times, with fixed incomes, family members to consider, higher bills etc.
And it matters because, as we know, this is a market which can change rapidly. At the Conference we had a long debate about interest-paying options for later life customers, and how it is imperative these are presented to the client, documented on the paperwork, and highlighted as options especially for those who could afford to pay some or all of the interest. Plus, of course, any decision on the client’s part not to do this.
But, again, what might not have seemed like an option for them at the initial advice stage, might seem like a better idea one/two/three years’, etc, down the line, or they might simply have the means to pay in the future. By being in regular contact with the client, you can ensure they get a positive outcome if their circumstances have changed – the product doesn’t need to be for life.
Plus, and this is a point around the potential for future complaints. Firstly, seeing customers more regularly, developing a stronger relationship, means that they not only feel more comfortable with you but you are also setting out solutions as time moves forward. This being the case, it is less likely that you’ll receive a complaint about this service either from the client themselves or – the source of many complaints – family members.
And, you’ll have a file which contains all your interactions at every step of the way, proving you delivered a positive outcome to them, not just after that initial advice/product but at all other junctures. Again, it proves your worth, the value you are providing, and shows the advice was right at that time and was reviewed regularly after it.
The other obvious point to make is that, who wouldn’t want a very personable, strong, long-term relationship with a client, and indeed, their family. It is likely to be the source not just of business from them, but potentially through a range of recommendations and referrals over time.
This is an age-group demographic who want good service. They don’t tend to trust institutions that much, they trust people, and by communicating your values, your service, your empathy, your skill set, experience, and everything that makes up you as an adviser, you are far more likely to secure their trust and their business.
In that sense, see Consumer Duty as a minimum standard point to move on from, with the aim of getting better with each client interaction. They will certainly appreciate it, and you will certainly feel the benefits of doing it.
Stuart Wilson is chairman at Air Club