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Consumer Duty’s first 18 months: How advisers are adapting and redefining value

The Financial Conduct Authority's (FCA) Consumer Duty, launched in July 2023, has now surpassed 18 months since its introduction. This guide takes you through how the industry has reacted, the challenges firms have faced, and the profound shifts we're seeing in adviser workflows and client relationships.

Contents:
The Four Consumer Duty Outcomes
Initial Reactions and Early Adaptations
Impact on Adviser Workflows and Client Focus
Fair Value and Cost Scrutiny
Is Consumer Duty Widening the Advice Gap?
A Tech-Driven Approach to Deliver Results
Sources and further reading

The Four Consumer Duty Outcomes | Back to the top

The Financial Conduct Authority (FCA) outlines the Consumer Duty's four outcomes as follows:

  • Products and Services: Ensure products are designed to meet the needs, characteristics, and objectives of a target group of customers and are distributed appropriately.
  • Price and Value: Guarantee that consumers receive fair value, meaning a reasonable relationship between the price paid and the overall benefit received.
  • Consumer Understanding: Provide information that supports and enables consumers to make informed decisions about financial products and services.
  • Consumer Support: Offer responsive and helpful customer service, making it as easy to complain about, switch, or cancel products or services as it was to buy them.

Consumer Duty is about raising the bar across the industry, centering clients’ needs and well-being in every business decision. It's no longer just about checking off regulatory boxes; it’s about truly enhancing client value and satisfaction.

As of November 6, 2024, the FCA has imposed fines totalling £103,722,381 for various breaches in 2024. However, none of these have been directly attributed to Consumer Duty breaches. The FCA's enforcement actions often involve multiple regulatory breaches, and detailed breakdowns attributing fines to specific rules, such as those under PRIN 2A or COCON 2.4, have not been provided to this date.

Initial Reactions and Early Adaptations | Back to the top

From day one, firms have poured effort into understanding these new standards. But as Carl Woodward of Simplify Consulting observed, the FCA’s guidance left much open to interpretation, leaving some firms unsure if they were fully compliant.

This challenge has been particularly sharp for smaller firms. As Görkem Barron of Lubbock Fine noted, “We all had to learn what Consumer Duty was about by listening to webinars, attending meetings, and undergoing training—on top of everything else we do.”

From day one, firms have poured effort into understanding these new standards. But as Carl Woodward of Simplify Consulting observed, the FCA’s guidance left much open to interpretation, leaving some firms unsure if they were fully compliant. This challenge has been particularly sharp for smaller firms. As Görkem Barron of Lubbock Fine noted, “We all had to learn what Consumer Duty was about by listening to webinars, attending meetings, and undergoing training—on top of everything else we do.”

Impact on Adviser Workflows and Client Focus | Back to the top

Consumer Duty has redefined how advisers work. Each team member has taken on compliance responsibilities alongside their primary roles, which adds a new layer of complexity. Scott Gallacher of Rowley Turton shared, “Consumer Duty training took up a huge amount of time across our team, all on top of our regular work.”

The standard has also led many advisers to reassess their client base, aiming to clarify target markets in line with fair value. Some have raised minimum asset requirements, narrowing their focus on clients who meet these new thresholds. For instance, Rohit Rohela of FinsBridge Financial Planning explained, “We had to redefine our target market… minimum assets jumped from £200,000 to £500,000, which meant we lost 20% of our client base.”

As firms streamline to stay compliant, many advisers are also looking to external providers. FE fundinfo research shows nearly a third (31%) of advisers now rely on DFMs, with 45% increasing their use of external investment solutions.

Fair Value and Cost Scrutiny | Back to the top

Consumer Duty’s emphasis on fair value has forced a rigorous reassessment of fees across the sector. Many advisers have adjusted fees in response, especially in Model Portfolio Services (MPS). For example:

  • According to FE fundinfo, the average MPS management fee fell from 25 basis points (bps) to 19bps
  • Abrdn has reduced fees on its MPS ranges from 25bps to 15bps, effective December 2023
  • Liontrust has similarly adjusted fees across its MPS and Wealth Solutions Service ranges, reducing discretionary fund management fees by up to 10bps

This shift towards transparent, fair fees underscores the industry’s commitment to delivering on Consumer Duty’s fair value expectations.

Is Consumer Duty Widening the Advice Gap? | Back to the top

While Consumer Duty aims to enhance client outcomes, it’s also nudging operational costs higher for many firms.

CoreData’s findings show that 72% of advisers expect rising business costs, with 60% predicting higher advice fees and a widened advice gap. For firms serving clients with modest portfolios, staying profitable under Consumer Duty has become increasingly difficult, leading some to pivot towards higher-value clients.

Three-quarters of advisers believe it’ll be tougher to serve lower-value clients, with many already prioritising those who can sustain higher fees.

A Tech-Driven Approach to Deliver Results | Back to the top

Consumer Duty’s demands mean technology is no longer a luxury; it’s essential for streamlining compliance and enhancing client experiences.

Research shows 39% of advisers say their firm needs to spend far more on advice tech to stay relevant. 20% say the Consumer Duty will see greater advances in adviser technology than the pandemic. This increases to 25% of HNW advisers. (CoreData Insights)

Technology enables advisers to automate processes, simplify client data management, and support accessible communication. Document approval workflows, for instance, allow secure, trackable exchanges, ensuring client understanding is documented and ready for audits.

Portals that consolidate client data give advisers a holistic view of each profile, enabling well-informed, personalised service.

moneyinfo gives advisers the tools to meet today’s demands with confidence and ease, transforming every client interaction into a streamlined experience.

Our digital fact-find feature delivers an up-to-the-minute, comprehensive view of each client’s financial landscape, pulling in data from multiple sources to support accurate, tailored recommendations.

Through our document approval workflows, clients can easily review and sign off on key documents, adding a layer of clarity and trust to each exchange.

The secure client portal deepens engagement by offering seamless messaging, document sharing, and accessibility features, empowering advisers to connect with clients on their terms.

With moneyinfo, advisers have a proactive, data-led approach that does more than meet Consumer Duty requirements; it raises the bar for service, efficiency, and client outcomes—all while supporting compliance.

Sources and further reading | Back to the top

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