Concern over the deadline for the FCA’s Consumer Duty regulations is growing among decision makers at investment, wealth and pension firms, according to recent research from Moneyhub.

The open finance and payments platform suggested that with less than nine months until the deadline for current products and services, one in ten (10%) senior decision makers, have confessed to not knowing much about the upcoming regulations. 

Moneyhub’s findings were based on a study of 150 senior decision makers, which included CEOs, chairmen and directors at investment firms, wealth managers and pension providers. It revealed that more than two thirds (69%) of investment, wealth and pension firms said that the new regulations would have a “significant impact” on their way of doing business.

However, the research also indicated that over half (51%) still did not have plans in place to become compliant ahead of the original April 2023 deadline set by the FCA. 

While the April deadline was pushed back to July in order to allow firms more time to implement their plans to become compliant, Moneyhub suggested there is still a concern that many will not be ready.

The FCA’s objective with the regulations is to benefit both financial services providers and customers through greater degrees of understanding, knowledge, and transparency. Accordingly, financial services firms will be required to provide customer support that meets the needs of the consumer, enabling them to act in their interest without hindrance, fully understanding the benefits and risks of the products and services.

Moneyhub CEO, Samantha Seaton, commented: “The Consumer Duty will test just how customer focused businesses truly are, however many firms are not prepared for the amount of data required to be able to design and distribute the most suitable products and services for customers and to prove that they are doing so.

“Without fully understanding the financial characteristics and objectives of their customers, firms could be at risk of recommending the wrong investments and products or failing to respond to changes in customers’ circumstances which might require them to offer alternative products and services to avoid foreseeable harm as a customers’ financial world evolves.

“Customer engagement is a key issue and also an opportunity for many firms, particularly pensions firms, who have historically struggled to engage busy or disinterested consumers with what are often complicated products.

“It is my hope that firms view Consumer Duty as a real opportunity to transform their business for the better.”

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