Duty forces four major changes
The consumer duty marks the largest regulatory change of pension and investments since “treating customers fairly” came through back in 2006. What does the duty mean in terms of major cultural and technology-led changes?
- The duty marks a cultural shift for platforms and providers, with increased focus on responding to customer needs and supporting advisers to deliver better outcomes.
- The duty demands simpler and more targeted advice options, bridging the advice gap with more sophisticated digital journeys and optimising retirement savings outcomes.
- The duty should accelerate data-rich digital integration: there is also clear opportunity for the whole market to apply open finance models to create data-rich digital customer journeys. Providers must collect accurate data, maintain permissions and use insights to serve the customer better. This will enable them to build innovative and relevant financial products more quickly.
- The duty should also accelerate integrated, omni-channel communications and support services. Providers must support advisers as well as consumers and improve their support of them both to retain assets.
The consumer duty undoubtedly creates real risk that provider/adviser tensions will rise. However, application of modern technologies, combined with better mastery of customer data and judicious sharing of that data between adviser and providers, could help bridge any of these divides in the interests of collectively serving customers better and achieving more positive financial outcomes for them longer term.
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Adrian Boulding is director of retirement strategy at Dunstan Thomas
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