Consumer Duty & Financial Advice

Ed Wilkinson

Dec 4, 2023 — 2 min read

Photo by Alexandre Debiève / Unsplash

The new Consumer Duty responsibilities mean that financial advisers must put their customers' needs first and ensure that they receive good outcomes. This includes:

Identifying and understanding customer needs: Advisers must take the time to understand their customers' individual circumstances, goals, and risk tolerance. This will help you to recommend suitable products and services and provide appropriate advice.
Providing clear and concise information: Advisers must communicate clearly and concisely with your customers, using plain English and avoiding jargon. You must also ensure that customers have access to all relevant information, including fees, charges, and risks.
Offering fair value: Advisers must ensure that the products and services you recommend offer fair value for money. You should also consider the customer's overall financial situation and avoid recommending products or services that are not suitable.
Preventing harm: Advisers must take steps to prevent harm to your customers. This includes identifying and mitigating potential risks, such as investment scams or unsuitable products.
Providing support: Advisers must provide their customers with the support they need, both before and after they take out a product or service. This includes providing ongoing customer service and handling complaints promptly and fairly.

What is the likely impact of Consumer Duty on Lead Generation

As a general rule the introduction of the Consumer Duty obligation suggest that financial advisers should:

Only use lead generation methods that are compliant with the Consumer Duty. This includes avoiding misleading or deceptive advertising, and ensuring that all lead generators are properly authorised and regulated.
Put in place systems and processes to ensure that leads are treated fairly and are not passed on to unauthorised third parties. This includes verifying the identity of leads, and ensuring that they are given clear and concise information about the products and services on offer.
Monitor and review their lead generation activities on an ongoing basis. This includes identifying any potential risks to consumers, and taking steps to mitigate those risks.

Here are some additional things that financial advisers should keep in mind when generating leads under the Consumer Duty:

Target their lead generation activities to the right audience. This includes identifying potential customers who are likely to be interested in their products and services, and avoiding wasting time and resources on leads who are not a good fit.
Use a variety of lead generation channels. This could include online marketing, social media, referrals, and networking events.
Track their lead generation results. This will help them to identify which channels are most effective, and make adjustments to their strategy as needed.

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