Then there are issues such as cross-subsidising client income. Holman says there is nothing in the guidance that talks about cross-subsidy directly. But the inference is "is somebody with a higher portfolio over here subsidising somebody over there and they're getting exactly the same service".
She continues: "It's forcing firms to properly look at what service are they providing. For some firms, whilst it's been a right pain in the backside, it has forced them to look at what they're doing and where the resources are going and they've identified they actually need to have a minimum fee in place, they've had to increase their charges for some people, some firms have introduced caps or tiering.
"For example, some have totally overhauled their client proposition and they've said it's been hard work, but actually it's been a really worthwhile exercise to do.
"It's one of those tasks, it's blooming hard and if you procrastinate you're not going to do yourself any favours. You need to just put pen to paper, get it all down, and then figure it out."
She says advisers will also need to look at what their competitors charge, and while there is no benchmark in place, advisers have to be able to explain why they've chosen the fees they have chosen.
"The FCA are not saying to firms you have to make changes to your pricing, they are challenging 'why are you charging (x per cent), is it just because everybody does?'"
No more technical terms
Communication is the other aspect that will be key under the consumer duty and this time it will be a case of really simplifying the language used.
"The consumer duty is not about taking away responsibility from the client, if anything, it is the total opposite," says Holman.
"It is saying that absolutely [consumers] need to take responsibility for what their decisions are. But we have to make sure that we present the information to them in such a way that they can understand. And that's always been the case, look at Principle 7 — be clear, fair, not misleading."
She says the difference now is that the consumer duty is breaking this down and is forcing companies to look at not just their suitability reports, but their email communications, their website, and not burying terms and conditions.
When it comes to presenting suitability reports the key is to make them sound the same way the adviser sounds to the client when speaking, Holman says, as she offers some tips and tricks.
