Consumer Duty: worried about more red tape?

29 May

29May

Is Consumer Duty the final straw in terms of added regulation, prompting you to consider being a retiring IFA and having your IFA Business for sale? Every IFA firm, after the implementation of MiFID II, GDPR, SM&CR and PROD are focused on further FCA compliance. Find out more…

Contemplating an Exit Strategy?

Many IFAs have specific concerns or worries about Consumer Duty, and with the deadline looming in July, it is one more piece of red tape in a long line of recent added stresses to ensure FCA Compliance. IFA retirement is on the rise – many will now consider retirement, either selling their client bank (known as Sell and Go) or remaining as an IFA, but as an employee (Sell and Stay)

A Fundamental Shift

The FCA has emphasised that the Consumer Duty is not just a set of rules, but a fundamental shift in the way that financial firms operate. The aim of the Consumer Duty is to create a culture of accountability and customer-focused behaviour within the financial services industry

Cut through the Red Tape

IFAs need to be aware of the challenges that they will face:

Compliance costs: The implementation of the Consumer Duty will require IFAs to make changes to their systems, processes, and training programs, which can be costly and time-consuming
Cultural change: The Consumer Duty requires a cultural shift in the financial services industry, with a focus on client-centricity and fair treatment. Some IFAs may find it difficult to change their business practices and adopt a more client-focused approach
Complexity: The Consumer Duty is a complex regulatory framework with multiple requirements that IFAs must meet. This complexity can make it difficult for IFAs to understand and comply with the new rules
Increased regulatory scrutiny: The implementation of the Consumer Duty will likely lead to increased regulatory scrutiny of IFAs. This scrutiny can be time-consuming and may require IFAs to provide additional information to the regulator
Client engagement: The Consumer Duty requires IFAs to engage more closely with their clients, which can be challenging for some IFAs who may not have the necessary skills or resources to do so effectively

To Sell, or to Embrace?

If this is not the final step in prompting retiring financial advisers to consider selling their IFA business, then focusing on ensuring that the new rules are followed, will further strengthen their reputations as trusted advisers

Better products and services: Clients can expect to receive products and services that are tailored to their individual circumstances and that offer good value for money
Greater transparency and clarity: Clients can expect to receive clear and jargon-free information about the products and services they are considering, which will help them make informed decisions
Fair treatment: Clients can expect to receive fair treatment from their financial adviser, and that they will not be misled or treated unfairly
Protection from harm: Clients can expect to be protected from risks such as mis-selling or other forms of financial harm
Increased accountability: The Consumer Duty creates a culture of accountability within the financial services industry, which means that financial firms are more likely to take responsibility for their actions and to act in the best interests of their customers

Reap the Benefits

Like anything in life, a situation is what you make it, and those IFAs either choosing to sell their IFA Business or those embracing the regulatory changes, will reap the benefits

"Change is the only constant in life, and embracing it leads to growth

and new opportunities." – Unknown

With you Every Step of the Way

If you are a retiring IFA, who would like to talk through your options, contact us at www.truestarlegacy.co.uk or email info@truestartalent.co.uk

Truestar Legacy is a division of Truestar Talent: We are with you every step of the way