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Financial advisers should improve their account administration processes and buyer communications — or danger falling foul of the brand new Consumer Duty rules.
This is the warning from UK monetary recommendation companies and consultants following the introduction in July of Consumer Duty rules by the Financial Conduct Authority, the regulator, aimed toward elevating client safety requirements.
With the FCA watching and pledging to take enforcement motion in opposition to failures, business executives say they’ll proceed to overview and modify the best way they handle and reply to purchasers.
This dedication is shared by many companies featured in an annual listing of the most effective 100 UK recommendation companies, compiled by FTAdviser, the FT specialist publication.
Jeremy Woodley, an business veteran and director of the Fry Group, an FTAdviser prime 100 agency, mentioned: “Consumer Duty is designed to ensure clients get the appropriate support, advice and level of service they need to achieve this right outcome, when they need to achieve it.
“When it comes to client communication, striking the right balance in terms of both quality and quantity is a challenge,” he mentioned. “It’s crucial to ask ourselves whether our communications align and are appropriate for the level of service each client is telling us they want.”
Jessica Ayres, chartered monetary adviser at London-based Timothy James & Partners — one other FTAdviser Top 100 agency this 12 months — mentioned advisers should handle client expectations and guarantee there may be “consistent communication with clients”.
This ought to contain being clear concerning the financial state of affairs, setting expectations for monetary targets, and revisiting their charges. “We are ultimately responsible for ensuring they get value for their money,” she mentioned.
But regardless of the business’s dedication to ship higher communications, it appears many consumers usually are not glad. Alex Whitson is managing director of VouchedFor, an analysis website for monetary advisers, related to Trustpilot. He mentioned VouchedFor’s Elevation system — a platform utilizing insights from client opinions to assist improve client expertise — has revealed a disconnect between client satisfaction and adviser communication.
While the opinions present 95 per cent of purchasers would suggest their advisers, greater than one-third barely ever communicate with their adviser.
He mentioned: “There is room for improvement. One of the most important drivers of client advocacy is regular communication, and yet 34 per cent of clients speak with their adviser once or less each year.”
It is not only the amount that’s missing but in addition the standard. Woodley mentioned: “Advice firms need to improve how they communicate and explain things in the clearest, most open and engaging way possible.”
According to Lowes Financial Management, one other Top 100 firm, the advance of know-how “presents opportunities” to improve the “quality of service provided to clients, by embracing digital tools, such as artificial intelligence”.
Ian Lowes, managing director, mentioned: “Implementing robust initiatives to safeguard client data is paramount. Advice firms will also confront challenges by potential disrupters in the market, comprising digitised newcomers aiming to cater to a generation of clients who prefer non face-to-face guidance.”
The FTAdviser listing is compiled by Financial Clarity, an ISS Market Intelligence enterprise. An extended listing of 150 corporations, chosen on product sales for the 12 months to June 2023, was pared down to 100, by making use of qualitative components akin to how lengthy companies have been in enterprise, and whether or not they’re chartered by the Chartered Insurance Institute or accredited by the Chartered Institute for Securities & Investment. The listing could be discovered on FTAdviser.com right here: 2023top100.ftadviser.com.
Simoney Kyriakou is editor of FTAdviser
https://www.ft.com/content/fc48089a-c916-4842-84d5-426623153736