IFAs complain Consumer Duty has made it harder to advise clients

Six months after it was implemented, over two fifths (45%) of IFAs believe the Consumer Duty has made it harder to advise clients.

Despite the challenges, two thirds (65%) say that their business has implemented Consumer Duty “well.”

Research of consumers and IFAs by market analyser and research company Opinium found that almost a third (30%) of consumers who heard of Consumer Duty feel they have been provided with “less clear” financial advice in the last 6 months.

Some 71% of consumers say they have never heard of the Consumer Duty.

The research of 2,000 adults found that one in seven (16%) independent financial advisers (IFAs) say they do not feel clear on what good customer outcomes look like.

Opinium’s latest polling of the views of IFAs found that almost half (45%) of IFAs feel that the new rules have made it harder to give clients advice, with 72% saying they have seen an increase in admin and reporting duties and 61% complaining they now have less time to advise clients.

Impact of Consumer Duty

Source: Opinium 

About a third (30%) of consumers who had heard of Consumer Duty believe they have been provided with financial advice that was “less clear” in the past 6 months and 28% said they had received an all-around less positive service from their financial service providers.

Awareness of the Consumer Duty outside of the industry remains low, with the majority (71%) of all UK consumers claiming they have never heard of it.

Opinium says that despite the hurdles, two thirds (65%) of IFAs believe their businesses have successfully integrated the Consumer Duty principles, although 60% acknowledge facing difficulties in meeting the FCA’s reporting requirements.

Alexa Nightingale, head of financial services research at Opinium, said: “Six months on from Consumer Duty being brought in, the IFA polling shows there is some work to be done in terms of how supported firms feel in implementing the new rules. As with any major change in regulation, it’s not surprising there are initial teething problems and these currently seem to be extending to the consumer experience – which Consumer Duty was brought in to improve. 

“It appears there is more that could be done by the regulator to help support firms. However, if IFAs and their businesses are able to share their learnings and knowledge externally, the lack of certainty also presents an opportunity for sharing that could benefit the whole industry.”

• The research was carried out using Opinium’s IFA omnibus, a research community of IFAs. Opinium Research carried out an online survey of 200 UK Financial Advisers, between 24 – 31 January 2024. Opinium conducted an online survey of 2,000 UK Adults aged 18+, between 30 January – 2 February 2024. Results have been weighted to be nationally representative.