Consumer Duty

Introduction

The Financial Conduct Authority (‘FCA’) introduced a new Consumer Duty in July 2023. It represented one of the largest regulatory changes that the finance industry has had to address in recent years. Clients and firms should all benefit from the new regime, which focuses on firms delivering ‘good outcomes’ for customers. This standard applies across the industry, from mortgage lenders and insurance providers to financial advisers and investment managers. It replaced the concept of ‘treating customers fairly’, a standard introduced by the FCA over 15 years ago.

Overview

We welcomed the new Consumer Duty (‘Duty’) and its aim of improving the standard of services that customers receive across the financial services industry. The duty focuses on ‘good consumer outcomes’ and all regulated firms were expected to have completed their plans and be meeting the regulatory requirements of the duty by Summer 2023. You may have been contacted directly by your car insurer, for example, to explain how they propose to ensure that they deliver their obligations to you under the Duty. You may have received a change to the standard terms of business that your bank, for example, is providing. Do ask questions if you are unsure about what is involved and how it might impact you.

The change has been described as ‘revolution, not evolution’ and we believe that it is incumbent upon everyone in our industry to make the changes needed proactively. Our CEO, Nick Coghill, comments “We pride ourselves on achieving the highest levels of service for our valued clients and we are seizing this opportunity to further enhance our client support to ensure good outcomes are delivered.”

Determining whether consumers have received good outcomes will be measured based on the individual customer experience. The Duty invited us to look at the journey that you take with CAM. It emphasised the importance of achieving high standards of service and communication during the ongoing management of your portfolio and provision of advice to you, not just at the stage when you first join us. We are a people-focused business and have enjoyed rising to the challenges that this has presented.

The Board and our Executive Committee lead the Consumer Duty process, but staff at all levels of seniority are involved, working together in our Consumer Duty Committee. We also work closely with industry bodies that organise Consumer Duty working groups.

We have an ongoing exercise to capture as much client feedback as possible, from simple emails of thanks for a job well done through to more complex situations in which, for example, we may have experienced delays to transferring in client assets from a third party. Building this database is providing a continuous list of ideas for development and improvement. We will add to this by repeating our client feedback survey regularly to measure our progress since the last survey.

We have created a group representing all departments to ensure that we provide a robust service to clients who may find it more challenging to achieve good outcomes. We have been working closely with staff, changing policy and procedure, developing new guidance and oversight, and looking at IT solutions to make information more accessible. This is certainly an area that we will continue to work on as we all agree that we are continually learning and trying to develop support techniques. Whether it is reassuring a client who is suffering anxiety because of change in financial circumstances or offering support to the family of a dementia sufferer, we are determined to set ourselves the highest standards of service. We are working closely with industry bodies and have launched a new overlay to our website to ensure all clients can access information easily. However, it’s the people skills that are most important in this area and our programme of staff training and development means we are actively working to meet the challenge.

Culture and training has been very important within our approach to Consumer Duty. There have been several firmwide training sessions on Consumer Duty in more general, regulatory terms over the past months. We have also continued our programme of training on client service, including delivering effective presentations and handling complaints. Staff have also been receiving training for their specific team responsibilities and general skills training; for example on clear writing and communication, and additional information on particular aspects of the services that we provide, such as seminars on alternative investments. Client feedback, including our regular client survey, has also been very helpful in identifying areas where our approach is working and those where we need to make changes.

Conclusion

Consumer Duty is not something that we are afraid of; we are confident in our ability to enable our clients to achieve good outcomes. Working in a collegiate, knowledge-sharing environment will make sure that we will achieve our goals.