Consumer Duty and the rise of the change agent
By Heather Hopkins | 03 October 2023 | 3 minute read
There is a current of change running through the wealth management industry. A growing number of business leaders are pushing back against a conservative “actuarial” culture — and in so doing, they’re delivering better outcomes for clients. The epicenter of the change is Consumer Duty.
Of course, I encounter my fair share of Consumer Duty skepticism. I get it: the rules are costly to implement and most firms have seen little practical change. A few funds have closed. Some financial planners have introduced new fee models. We’ll share some initial findings in NextWealth’s forthcoming and free “Financial Advice Business Benchmarks” report. Sign up to get a copy when it’s released 10 October.
This has led many to question, was the Consumer Duty shakeup worth it? I think so. Hear me out.
Many large financial institutions have been in run by actuarially-minded individuals. Do you sometimes feel that number-crunchers are making product changes based on complex calculations, rather than speaking to clients? Marketing and distribution-minded people struggled to push back. But now they can, and the compliance team’s on side. Why? Because of the simple idea: “putting customer needs first.”
Consumer Duty was introduced not to force firms to collect reams of data, send oodles of surveys or to conduct complicated due-diligence on partners. At its core, it was about driving cultural change — to force firms to act in the best interest of customers. Change-agents are sprouting up everywhere. Emboldened by that simple phrase “putting customer needs first,” they are developing propositions, products and comms that will help customers make sense of their finances and make life easier for their advisers.
Sometimes industries are re-set by economic events, sometimes by regulatory change. The industry is sailing into a hurricane of both. Three- and five-year portfolio returns pale in comparison to rates offered to one-year fixed rates on cash, sparking a dash for cash. The RDR re-shaped retail wealth management but many expect it will pale in comparison to the scope and potential implications of Consumer Duty.
So, in our first newsletter of the autumn, I’m pleased to announce that our theme for the new academic year is “change agents”. We will applaud, empower and embolden the change-agents in our industry: those brave and steadfast executives who push their firms to deliver solutions that put customer needs first.
It may come as no surprise that the theme of NextWealth Live, taking place on 19 March 2024 at the Royal Institution, is “Change Agents”. Hear from acclaimed leaders in our industry, including:
- Mark Duckworth, CEO, Schroders Personal Wealth
- Ruth Handcock, CEO, Octopus Money
- Richard Wilson, CEO, abrdn Personal Wealth
- Nici Audhlam-Gardiner, CEO, Foresters Financial UK
You can book tickets on our website. Groups of three or more get a 20% discount. Tickets go up by £100 in December and they always sell out. So be sure to book early!
MPS is growing faster than the platform market and costs for clients are falling. These are two key findings of NextWealth’s latest MPS Proposition Comparison Report, designed to provide insights and trends into how the advice profession is managing client investments.