Eighty-six per cent of financial advisers are anticipating that they will need to make changes to their operations as a result of the FCA’s Consumer Duty, research from Air has indicated.

The later life lending platform also revealed that 17% of advisers feel unprepared for the upcoming regulatory changes, while a further 8% were unsure about how prepared they are.

With growing pressure to provide support for consumers amid the UK’s economic uncertainty, Air stated that the introduction of the FCA’s Consumer Duty has become a “pressing issue” for advisers, especially given the relatively short turnaround required for its implementation.

Air’s research was based on a study among 220 advisers operating in the later life lending market between October and November. It also revealed that when asked how they expect the Consumer Duty to impact their operations and processes, 47% of advisers believe they will need to change the way they document the advice they provide.

The same proportion (47%) also said they would need to review the customer journey and make changes as appropriate, while 29% said they will better need to assess and document the fair value justification of their renumeration. Over a quarter (26%) said they would need to redefine the metrics they use to measure whether a good customer outcome has been achieved.

Chairman of Air Club, Stuart Wilson, commented: “The FCA’s Consumer Duty is the largest shake-up in regulation for years with far reaching effects across all financial services firms. And it’s clear to see from our research today that these reforms will have a profound impact on advisers in the later life lending market, with 86% believing they will need to change how they operate but far fewer being prepared for this shift.

“While there is no doubt many advisers already have some of the mechanisms and systems in place to prosper in this new world, they should not be complacent.  Now is the time to review, road test your approach and ensure that you understand the most current industry thinking on this fundamental change.

“At Air, we are committed to supporting advisers in the later life lending sector by providing the tools and information needed to achieve this.  As we approach the implementation deadline, we will be hosting debates as well as webinars to ensure our advisers are as informed and prepared as possible.”

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