It’s easy to say that you put clients at the heart of everything you do, but at Magus Wealth, we do more than just say it.
Consumer Duty – what is it and why should you care?
Many people face barriers in pursuing their financial objectives and The Financial Conduct Authority (FCA), the UK’s regulatory body for financial advisers and financial services firms, wants to see firms deliver a higher standard of client care and protection, and to go further to equip people to make effective decisions, putting their clients’ best interests at the heart of their business, offering products and services that are fit for purpose and represent fair value.
The overarching principle is ‘A firm must act to deliver good outcomes for consumers’. Guidance also breaks this principle into three cross-cutting rules and four key outcomes that all firms must follow and be able to demonstrate that they are consistently meeting this principle for all their clients.
The overarching principle
‘A firm must act to deliver good outcomes for consumers’. A straightforward and perfectly reasonable expectation for clients. All regulated firms and advisers who are members of the Consumer Duty Alliance have adopted this principle.
Guidance also breaks this principle into three cross-cutting rules and four key outcomes that all firms must follow and be able to demonstrate that they are consistently meeting this principle for all their clients.
The three cross-cutting rules that firms must adhere to
These rules outline the FCA’s overarching expectations of firms to:
- Act in good faith towards consumers
- Avoid causing foreseeable harm to consumers
- Enable and support consumers to pursue their financial objectives
The four consumer outcomes you should expect
These outcomes build on the Consumer Principle and the Cross-cutting rules and represent the FCA’s expectations of a firm in its relationships with consumers:
- Products and services. All products and services must be fit for purpose. This means designing solutions to meet your specific needs and only presenting them to the consumers whose needs they are designed to meet
- Price and value. Products and services should represent fair value, not just because they meet your needs and objectives but also in relation to their price.
- Consumer understanding. A regulated firm should give you the information that you need, at the right time and presented in a way you can understand.
- Consumer support. You should expect to receive a service that meets your needs for as long as you’re dealing with a firm.
The Consumer Duty Alliance
So far so good, but as you would expect, we didn’t stop here, and Magus Wealth are members of the Consumer Duty Alliance, a not-for-profit, independent membership body. Its purpose is to inspire greater confidence and trust in financial advice and financial planning by supporting the delivery of consistently good outcomes.
Members of the Alliance:
- Embrace FCA rules and view the new rules as an opportunity to raise the standing of the financial planning and advice profession
- Have made a commitment to an independent Code of Professional standards as a way of demonstrating their commitment to deliver on their obligations and responsibilities to you
Amanda Mayes, Operation Director, Magus Wealth says, “We signed up to the Consumer Duty Alliance because we are committed to building trust in financial advisers and hope that this new alliance will provide tangible and meaningful support in this area. We clearly understand the value of providing clients with services and products they can easily understand – we’ve always believed and are passionate about supporting the very best client outcomes”.
The Alliance is about promoting best practices, creating trust, and delivering the best client outcomes, which are reasonable expectations for anyone.
The goal is that as a client you should always feel empowered to make informed decisions, always feel you can ask questions, take time to consider recommendations, and be confident in any advice given and recommendations made.
You can find out more here:
You can find out more and view the code of professional standards we adhere to here