An Audience With Royal London’s Clare Moffat on what the new Consumer Duty means for advisers and their clients

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How will the new regulations benefit clients and their families?

Over time, we have increased consumer trust in the financial services industry and fairer treatment of vulnerable people. We hope to see greater financial resilience across society and fewer complaints about poor value and products that meet the needs of the client. There need to be robust conversations about probability, risk, and protection. These conversations should include discussions about the benefits of multi-covered plans, which can include critical illness, income protection or family income benefit payment to futureproof and protect clients against their biggest risks. Conversations would also look at the suitability of products and price for other ways to help achieve good outcomes.

Providers need to ensure that tools and resources are available, even if budgets are tight

Evidence is important, it is not just about doing the right things for consumers but being able to document them

What will the new Consumer Duty mean for protection advisers?

This is a move from treating customers fairly to treating customers well. It is about putting the consumer at the heart of financial services. According to our Consumer Duty research report, 55% of advisers expect to have to make changes to their business practices. However, almost one in five have not heard of the new Consumer Duty. Businesses of all sizes will be required to deliver good outcomes for retail consumers. That means firms must act in good faith and avoid foreseeable harm, while enabling and supporting customers to pursue their financial objectives. More compliance often feels tough as there might be additional costs, but in the long term, this will benefit financial services.

You can watch the interview here or read her views below

The new consumer duty will require businesses to deliver good outcomes for retail consumers, while supporting clients to pursue their financial aims. Royal London’s Clare Moffat, Head of the Intermediary Development & Technical Team, explains what the Consumer Duty means to protection advisers, the steps advisers should take to prepare for the changes, and how these new regulations will benefit clients and their families.

STEPS TO PREPARe

NEW CONSUMER DUTY

Video interview

INTRODUCTION

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#04

An Audience With

Royal London’s Clare Moffat, Head of the Intermediary Development & Technical Team, on what the new Consumer Duty means for advisers and how the new regulations will benefit their clients

What steps should advisers take to prepare for the Consumer Duty?

They should start by mapping out the various stages of the mortgage protection journey through a consumer lens. Advisers need to think about fair value and communication. Evidence is important, it is not just about doing the right things for consumers but being able to document them. If the Financial Conduct Authority (FCA) turns up tomorrow, there must be clarity around what and why something is being done. Firms will need to monitor, identify, and review outcomes and they will have to understand the “why” behind these outcomes. They will need to have processes in place to adapt and change products, services, policies, or practice. Finally, advisers will need to think about signposting. They should make a client aware they will cover protection or signpost clients to a protection specialist in order to help clients get access to services like will writing or tax advice.

BENEFITS FOR CLIENTS

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How can advisers meet Consumer Duty requirements when clients are under increasing financial pressure?

Advisers can highlight the consequences of not having protection in place. For example, Statutory Sick Pay (SSP) is only £99.35 a week. With this be enough client to live on long term? Providers need to ensure that tools and resources are available, even if budgets are tight. Royal London has a personalised risk report and Value of menu tool to help show the need for protection and how a plan can be tailored to meet the needs and budgets of clients. Advisers should remind clients of the benefits which are included, and which provide additional value. Royal London’s Critical Illness Cover includes several additional conditions, and our IP includes back to work payments, fracture cover and hospitalisation payments. If clients decide that they need protection, but that they cannot afford it, advisers will need to document this to fulfil the requirements of Consumer Duty. For most, this is about documenting what they are already doing for their clients.

MEETING REQUIREMENTS

An Audience With

INTRODUCTION

Video interview

Defining themes

Thematic etfs

maximising benefits

Environmental impact

Learn more about Royal London

MEETING REQUIREMENTS

BENEFITS FOR CLIENTS

STEPS TO PREPARe

NEW CONSUMER DUTY

Video interview

INTRODUCTION