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According to a survey of advisers by Copia Capital Management, just 27 per cent of firm felt they were on top of the work needed to comply with the rules.
The poll of 74 advisers was part of a webinar on preparing for consumer duty with Copia’s managing director, Robert Vaudry, head of investments, Joanne Benson, and the Lang Cat’s consulting director, Mike Barrett.
Within the webinar, Barrett discussed the requirements of the target market assessment under consumer duty and warned advisers that it was “dangerously naive” to segment advice propositions by wealth.
“Two people with the same level of assets could have very different requirements from their financial planning,” he said.
“It’s best practice to segment around need, but this needs to be done in sufficient detail to take into account that even those who share the same need from an investment point of view, for instance saving for retirement, may have different needs from a tax and financial planning perspective, for example, if one is employed and the other self-employed.”
Barrett said most advisers know their customers well, so this will not be a huge shift.
“It is just a case of identifying and documenting these detailed target market segments, so you can then demonstrate through your research and due diligence processes how the products and services you recommend, including the platform and investment services you use, meet the needs of your target clients,” he added.
Meanwhile, Vaudry said from speaking with advisers, many firms are still trying to understand the full implications of the consumer duty requirements.
He said: “We’re committed to helping firms navigate their responsibilities, providing practical guidance on the implementation priorities while ensuring that their investment solutions deliver the best outcomes for the firm as well as its clients.”
sonia.rach@ft.com
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