Approximately 8 per cent of adults had received financial advice, up from 6 per cent in 2017. Adviser numbers had risen from 35,000 in 2012 to 36,400 in 2019.
But many consumers were still holding substantial sums in cash, which the FCA considered to be a bad thing, and there was still a clustering of advice services around certain types and for want of a better phrase, ‘price points’.
The various reviews of the industry were not being carried out, however, in a vacuum. At the same time as the RDR and FAMR were being implemented, some were arguing that a more fundamental reform of the way firms treat their customers should be underway.
In 2011 the regulator’s own Financial Services Consumer Panel argued for a stronger duty of care to consumers.
Its reasoning was that this would help the industry win back trust lost in the financial crisis, in the way that the Dodd-Frank Act had intended in the US in 2010.
The panel continued to pursue this line of argument, expressing strongly held views in 2017 that the treating customers fairly (TCF) regime was not fit for purpose, was not protecting consumers from conflicts of interest or deterring firms from mis-selling.
At the same time the highly respected and influential Macmillan Cancer Support charity was also lobbying for banks to have a duty of care to customers, to give people with cancer confidence that they could trust their bank to act in their best interests during times of stress.
Both the panel and Macmillan wanted a requirement for firms to take their customers’ best interests into account at every stage of their engagement, which they claimed TCF was not doing.
To an extent, the FCA acknowledged this. It consulted on the idea of a duty of care in 2018, admitting in its feedback that "most respondents consider that levels of consumer harm are high and change is needed to better protect consumers".
And so, with RDR reforms that had not driven forward change as fast as the regulator would have liked, a fast-changing environment and some egregious behaviour in parts of the industry, the FCA went to work discussing, consulting and consulting again on what was originally a duty of care, and which then became a consumer duty, which is where we have ended up in 2022.
It is worth looking at the structure of it to see how we got here from the previous initiatives.
The regulator’s aim, right back in that first discussion paper in 2007, was for a principles-based regime.
