Advisers’ understanding of where improvements need to be made in relation to consumer duty rules is “encouraging”, according to new research.
A study by RSMR highlighted the importance of centralised investment propositions (CIPs), which allow advisers to deliver consistent investment experience across their client base.
Of more than 100 advisers surveyed, 58 per cent said it would be more difficult to meet and prove they have met consumer duty requirements for investments managed outside of CIPs, also known as approved panels.
The new regulations were introduced by the FCA three months ago with the aim of improving outcomes for consumers.
James Senior, head of marketing and business development, said: “In the stricter world of consumer duty, and in the sensible world anyway, they should really only be managing approved solutions.
“But of course, that’s easier said than done, depending on their history with their clients among other things. How do you get them to move assets? They’ve got to talk to the client."
The survey found that three quarters of assets managed were on CIPs or approved panels, a trend Senior called “encouraging”.
Of those who said it would be more difficult to meet consumer duty for investments off CIPs, 60 per cent said it would be difficult to demonstrate fair price and value, one of the regulation’s objectives.
Jon Lycett, key accounts manager at RSMR, said this is something advisers can sometimes struggle with, often down to modesty.
“Many advisers still struggle to demonstrate the value of their own service that they provide and some of it comes from modesty in terms of being able to say to a client, this is the investment and there are fees associated but for my adviser fee this is what you get from me.
“I think there are many advisers out there who don’t like to say this to a client, in other words, the value of all these things I do for you. I do think the subjectivity of it is difficult.”
tara.o'connor@ft.com
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