Steven Cameron, Pensions Director at Aegon, comments on how the FCA's Consumer Duty will affect retirement advice.

The FCA’s Consumer Duty comes into effect at the end of July, and advisers will be considering what adjustments they need to make to their businesses to drive good outcomes for consumers.

While many will use this as an opportunity to re-examine the design and nature of the services they offer, some other advisers believe that the Consumer Duty is mainly a reinforcement of current best practice. Either way, advisers will need evidence to be able to demonstrate that they are delivering against the new rules.

Research from Aegon* shows the extent to which advisers expect the Consumer Duty to impact retirement advice. The three areas advisers expect to change most are:

• the way they communicate with clients (34%)
• the way they assess the value of advice (33%)
• the way they segment their client base and service offerings (28%)

The FCA’s Consumer Duty will have a significant impact on the retirement advice market, not necessarily drastically changing the advice itself, but certainly the framework and evidence that surrounds it.

Advisers should be considering all areas of potential change in their business and services that could help deliver good outcomes for their clients. Where confident they’re already delivering as the FCA would expect, it is good practice to document how they’ve come to that conclusion to avoid being viewed by the FCA as overconfident or complacent.

The Consumer Duty seeks to put the client first and demands that consumers receive communications they can understand, services that meet their needs and which offer fair value. These considerations are mirrored in the key areas advisers expect to make change in their retirement advice offering.

Full release: Advisers reveal how they expect Consumer Duty to impact retirement advice

✉️ Tess Gee, Aegon UK, 07884 504626