There is no right or wrong with consumer duty: there is only doing right by the client, according to Keith Richards, founder and CEO of the Consumer Duty Alliance.
Speaking at the FTAdviser Financial Advice Forum 2023 at the Leonardo Royal Hotel City in London, Richards and his fellow panellists discussed what the next steps would be for consumer duty as more scrutiny comes to bear on the profession.
But Richards said consumer duty was really the amalgamation of "four decades of regulator reform" to force changes in behaviour.
He said it was important to see how consumer duty was "putting everyone across financial services on the hook" when it comes to delivering the very best consumer outcomes.
Yet this does not look the same for every company, he said. "With approximately 5,300 firms in the UK the approaches that firms have taken will be very different, but so far it has been positive, even if it has been time-consuming for some.
“What we have to learn as we go along - there is no right or wrong, it is about doing right by the clients that you serve.”
Fellow panellist Tom McPhail, director of public affairs at consultancy the Lang Cat, agreed that some firms have found it time-consuming, while others have not, but warned against falling into complacency post-implementation.
He told the packed audience: “There is an interesting polarisation among firms that we are researching. There is some sense that firms feel this is business as usual, reflected in some of the FCA communications earlier this year which said ‘this is not business as usual’.
“I suspect some firms are that end and I would suggest that’s not the best place to be; other firms we have seen taking this very seriously, monitoring and recording and assessing their pricing and looking to see what is value and redefining how they deliver their services to target and non-target markets."
Catherine Thirlaway, associate director at AlphaFMC, said the importance was being practical and understanding where there is a need for improvement rather than trying to change absolutely everything.
She said: “The FCA has to be practical in its application of this. So trying to get all your people to write beautiful reports instead of servicing the customers is not what the regulator is asking for here.
"It has to be about the principles, the operations, and how these are embedded in all your business."
But she warned this is the responsibility of everyone. "It's not just the responsibility of the chief executive or the compliance officer. This must be embedded across the whole firm.
"Yes you have to be sensible and pragmatic about the adoption and ongoing compliance with consumer duty within your firms."
