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In a survey carried out between late February and early April 2023, Panacea asked its adviser community about the impact of the FCA’s consumer duty and whether they were prepared for.
Some 2.8 per cent of respondents did not think the consumer duty would impact their business costs while 5.6 per cent said they were unsure.
The survey, which received 136 responses, revealed three quarters of advisers (75 per cent) said support from the FCA around the consumer duty has not been helpful or easy to understand.
Only 5.6 per cent said the FCA support has been helpful, while 19.4 per cent said they were unsure.
Some of the adviser comments included: “Much depends on what they retrospectively choose to judge us on. Vague as always, they should be more prescriptive.”
Another said: “Too much jargon - not enough clear examples of what they think 'it' looks like. To start sending emails that 'clarify' is worrying in that something should be understandable without the need to clarify.”
Elsewhere, more than half of advisers (63.9 per cent) said the increase in costs would be passed on to clients.
Only 16.7 per cent said costs would not be passed on, while 16.7 per cent said they were unsure.
One adviser said: “One must do so. There has been so much extra red tape since RDR.”
Another said: “Any increases will be proportionate and reluctantly charged but we have to be able to pay our staff and overheads.”
While another added: “We have to pass this on, it's likely to be in increased initial fees but will also mean we are less likely to discount ongoing fees.”
Another question asked whether advisers have, or will be, reviewing specific areas of the business.
When asked if they had made the appropriate changes to the business, 50 per cent said they were not quite there and still had some work to do and 19.4 per cent said there is still a lot to do.
A quarter (25 per cent) said they were fully compliant while 2.8 per cent said ‘what is consumer duty?’.
Derek Bradley, founder and chief executive of Panacea Adviser, said: “Whilst the concept of consumer duty is highly laudable, the world of financial services has been plagued by the failure to use plain English, which I think is almost always at the core of some considerable consumer detriment.
