PIMFA has issued a strong warning to advisory companies and wealth managers, advising them to avoid turning into “Consumer Duty Zombies” in light of the impending deadline for compliance with the new regulatory regime.
PIMFA has published a free Consumer Duty paper in partnership with expert associate members such as KPMG, DAC Beachcroft, Shoosmiths, and Altus Consulting. This paper delves into important insights discussed during the PIMFA CEO consumer duty roundtable.
The FCA has outlined seven key questions firms can expect when Consumer Duty comes into force. PIMFA emphasises the need for a cultural shift where firms align their mindset and product lines to deliver good outcomes for consumers.
The paper provides a summary of the Consumer Duty requirements, practical guidance on meeting FCA expectations, steps for compliance, tips on substantive compliance, and a Consumer Duty self-assessment tool by Altus Consulting. Firms are encouraged to make use of these resources to ensure compliance and future success.
PIMFA head of regulatory policy and compliance Alexandra Roberts says: “With just 28 days to go until the Consumer Duty comes into force it really is time for firms to make sure they are ready, or at the very least, on course to be ready by 31 July.
“Firms have been warned before, but it bears repeating that the Consumer Duty is not just an extension of Treating Customers Fairly. Consumer Duty will bring about fundamental changes to the way in which firms are supervised and regulated and require a cultural shift in attitudes.
“If any firms still need help there are lots and lots of resources on the PIMFA website but the team and our associate members are also happy to help so please use the information and resources available to ensure you meet the deadline.”
Aegon pensions director Steven Cameron says: “With the FCA’s Consumer Duty July deadline fast approaching, and with so much material provided by the FCA, it can be hard to see the wood for the trees. The Consumer Duty further reinforces the need for providers like Aegon to collaborate with advisers. Building on the many adviser discussions we’re having, we have a number of recommendations to make.
“The FCA has published a wealth of information including some we’d particularly recommend revisiting. As well as the most recent FCA 10 key questions, it’s worth looking at the full set of 39 example questions. These appear in the Final Guidance which also includes a helpful list of suggested Management Information. The portfolio letter on Consumer Investments is also particularly relevant to advisers.
“In this final stretch, advisers will want to make sure they have all the necessary evidence in place. I’d recommend documenting not just what changes you’ve made, but also where you’ve considered an aspect of your business and why you concluded it already meets the Duty requirements. It would also be helpful to have a formalised record of how you identify and adapt your services where customers have characteristics of vulnerability.
“Once the Duty is live, the FCA is likely to take a particular interest in adviser value assessments, target markets and approaches towards segmenting clients. All of this should be documented and reviewed on an ongoing basis.”
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