Over a third (37%) of adviser firms have changed their fee structure as a result of completing the Consumer Duty fair value exercise, according to research from Royal London.
The pensions and investment mutual said a fifth (21%) of those surveyed found making changes difficult and had to carry out a lot of work to comply, while 3% still need to make the required changes.
However, the majority of firms found the changes positive, with 67% of firms agreeing the work needed to carry out the fair value assessments has been worthwhile.
When asked whether they had updated their clients about Consumer Duty, only 20% had issued an update, while nearly double (39%) have made no mention of it and 41% have only mentioned it when prompted by their clients.
Jamie Jenkins, director of policy at Royal London, said the Consumer Duty was “making a difference to how firms operate.”
Jenkins said: “The Consumer Duty has prompted a great deal of activity from all areas of the financial services industry and, while this may have initially seemed onerous, it’s clear that it is making a difference to how firms operate in the interests of clients and customers. Financial advisers are closer to their clients than anyone else in the value chain, so they are very well placed to understand the changes needed to deliver good outcomes.”
Mike Barrett, consulting director at the lang cat, which worked alongside Royal London to produce the research, said the findings had highlighted the value of Consumer Duty.
“Reassuringly, our research shows a more positive sentiment, which, I think, reflects the advice sector’s transformation from an industry into a profession.
“Yes, there has been work to do to facilitate this transformation, however the intentions for Consumer Duty are hard to argue against. If the regulator can evidence proactive supervision, driving change and taking enforcement action where necessary, as well as helping advice firms understand best practice, we believe this positive sentiment can improve further,” Barrett said.
