Time and technology: Meeting the Consumer Duty

Time is running out. The end of April saw us pass the latest deadline and milestone for the introduction of the FCA’s new Consumer Duty. FCA guidance dictates that product manufacturers should now have completed their reviews to meet the outcome rules for their open products and services.

With summer on its way, the end of July implementation deadline for all new and existing products and services that are open to sale or renewal is fast approaching. The new era of “higher and clearer standards of consumer protection” is on us.

For many advisers, the challenges and administrative burden posed by these standards will be considerable. But adhering to the new rules is not just vital because it will mean firms avoid enforcement action and potential penalties, as the FCA’s latest Financial Lives survey reminds us how vulnerable many clients are. It found that almost a quarter (24%) – 12.9 million – of UK adults in 2022 demonstrated low financial resilience, up from one in five two years earlier.

In this context, the requirements of the Consumer Duty are only reasonable, and it is fitting that its focus is on ensuring all customers get appropriate advice and the best possible outcomes.

Effective communication

Two aspects will be critical to advisers achieving these better outcomes.

The first is communication. Consumer understanding is one of the four key outcomes at the heart of the duty. As the Duty states, customers should get “the information they need, at the right time, and presented in a way they can understand”.

That will mean spending more time with some customers to ensure they’re adequately informed. It will also mean providing timely information for all.

This could be challenging for some advisers, but it’s not unachievable. Technology can make a significant contribution by automating aspects of client communication. For example, it can schedule communications and deliver these to customers at key points in their mortgage journey, such as approaching renewals.

On the one hand, this ensures standard, timely communications for all clients (the right information at the right time). On the other, it also streamlines operations, freeing advisers’ time to dedicate to clients who need more support.

Automating communications helps with the other key aspect, too: evidencing communications.

The Consumer Duty brings an increased focus on recording the work of advisers to ensure good outcomes for customers. Here again, technology has a critical role. Automating processes enables advisers to ensure timely and appropriate communications for customers and provides the paper trail to demonstrate it occurred, should a firm need to provide evidence. Because, put simply, if you can’t prove it, it didn’t happen.

The artificial touch

Crucially, technology can do more than efficiently provide evidence of communications. Tools such as automated transcription technology like Otter use artificial intelligence to record audio and transcribe meetings. That saves time and improves the efficiency, accuracy, and thoroughness of evidencing advice. But it also enables advisers to easily refer back to and search through details in meetings months or years ago, ensuring they retain a good understanding of their customers.

It is not the only way AI is transforming advice, either. Many platforms, including Smartr365, have used AI to integrate additional tools and services for more holistic and comprehensive advice. Last June, for instance, we partnered with Unisure, to allow Smartr365 users to enjoy automated insurance quotes at key moments in the mortgage journey.

Crucially, these tools are not just making advice more efficient but better – streamlining processes whilst maintaining and even enhancing the quality of service. They can not only help ensure delivery of communications that are consistent, timely, and tailored – but capture client information to build a more rounded view and better understanding of the customer.

Technology can provide advisers with the key commodities they need to fulfil the new Duty: both the time to spend with customers providing their expertise, and the knowledge of the customer to make sure they get the most suitable advice.