Consumer Duty – What have we learned so far? – Part 2

“Protection sales are down by approximately 10% over the last couple of years. And this flies in the face of what many of our expectations would have been when Consumer Duty was launched. So maybe we need to take into account some of the macro economic factors as well.”

“There’s a heightened sense of responsibility on us all. There’s increased scrutiny from the regulator keeping protection on mortgage and wealth adviser’s client meeting agendas is definitely challenging. There are elongated advice processes and underwriting processes, and this is going to impact advisers’ return on investment. And again may put some advisers off from entering these conversations in the first place. There is a willingness to arrange more protection, but the complexity is daunting. And as a result, there are more specialists creating strategic partnerships. Surely it makes sense to refer clients to a trusted partner for protection advice rather than just walk past the conversation if you’re unable to write the protection yourself.”

“There’s a real need for leadership in the industry at the moment. I think we need to shout about our purpose. So many of our conversations are based on what we don’t do so well, rather than what we do do well. We need to build great cultures within our businesses where people want to join it and stay within our industry because they’re proud of what they do. And feeling that we can all make a difference really matters. Consumer duty gives us this opportunity. We arrange amazing products that have a profound effect on people’s lives.”

“Getting back to basics about how to establish a need, how to identify needs, even if they’re not going to write it themselves. That bit is really, really important. Encouraging client engagement. If the need has been established, are they happy to be contacted? Building trust I think is the most important thing.”

“I believe we need to raise our expectations and our standards a lot. From marketing to advertising, placing benefits before price. We should stop selling ourselves short because we’re diminishing the value of our products by selling and advertising and price. So our advice processes to our subsequent underwriting processes, to ongoing communication with clients, specifically providing annual review statements as well as regular reviews to claims. For me, it’s simply not enough to say we pay all valid claims or we pay 98% of claims.”

“I think it’s time for us all to hold ourselves to account and not just publish how many claims we pay and what percentage we claim, but how quickly do we pay them by product type? Because that’s what matters to our clients and fulfilling Consumer Duty. That’s got to be at the heart of it, surely.”

“What I have seen in terms of changes post-Consumer Duty, from a network point of view, is our firms and advisors getting in touch more than they ever did before to say, ‘right, what do I need to do? Not just Consumer Duty, but how do I improve what I deliver to clients? How do I go about my fact-finding so it’s better? How do I look at my processes?’ So many took on new practices and looked at how they were fact-finding, how they could make it better and encourage clients even more.”

“I think providers and networks have all stepped up to do more to, to encourage the right behaviours and develop better skill sets as well. It’s not about products. It’s about our client situations. It’s about their lives ahead of them, what their future holds. And I think when we really get to know people better, that is when the right solutions are put for them. It isn’t about price. You don’t start with price. You start with what’s right for people and it is about putting what’s right in front of people.”

“We’re not reviewing products and we’re not reviewing mortgages. We are reviewing people and their lives and their circumstances. And I think being proactive with that has all the benefits of keeping those clients close. you’re caring for them.”

“So what have I seen in terms of changes in the market post-Consumer Duty? Well, firstly, a greater emphasis and focus on educating consumers, whether that be through social media, whether it be through conversations with the clients, I’ve seen a lot more advisors using their, knowledge to educate consumers rather than just push products, which in of itself is then a great way of getting the clients more engaged. Greater focus on value over price, which has been a real eye opener for me. And wonderful to see. I’ve seen less reluctance to discuss protection. I’ve seen more advisers actually having the conversations, which is very positive, huge uptake in firms looking for coaching and support.”

“I have seen increasing firms looking to increase the frequency of their reviews with their clients, which I think is a huge, brilliant outcome from Consumer Duty, which is firms being more focussed on having those regular contacts with their clients, making sure these policies remain fit for purpose, not the one and done attitude.”

“Less box ticking and more embedded advice processes I’ve seen from a lot of firms, which is very positive. Also a focus on prioritisation, which is brilliant, right? Because I don’t think that’s necessarily been a topic of discussion in the industry for a long time. So to see this prioritisation model being revisited and that naturally translates then into much greater numbers of particular policies being sold, specifically things like income protection and also family benefit.”

“In terms of educating, how do I feel it’s helped? As I say, I’ve seen much greater emphasis on value over price, that prioritisation model. What underpins the advice that you’re giving? Would that be wealth mortgage or even protection standalone? I’ve seen a lot of advisors challenging convention thinking more holistically, which I think is really, really important.”

“I’ve seen a much greater willingness from advisors to learn and develop, which I think is brilliant. There’s still a large cohort who have done nothing, when I go out and speak to certain clients, particularly from a coaching perspective. I’ve had conversations around Consumer Duty, looked at their processes, and they’re almost adamant that they’re already Consumer Duty compliant. And I have to have some very uncomfortable conversations with them. So they’re really not. And their prioritisation models are not good enough.”