Around one in three (32%) financial advisers are expecting their customer fees to increase as a result of the Financial Conduct Authority’s (FCA’s) Consumer Duty.

According to wealth manager Quilter, over half of advisers (55%) expect their fees to remain the same, while just 9% are expecting fees to decrease as a result of the Consumer Duty regulation.

From 31 July, the FCA’s Consumer Duty will come into force, which includes the price and value outcome which ultimately aims to ensure consumers receive “fair value”. While the price paid is not solely indicative of value, it is an integral part and is something advisers will need to carefully consider to ensure they meet Consumer Duty requirements.

Quilter’s research, gathered by Boring Money, revealed that considerably more directly authorised financial planners (38%) are concerned they will need to increase their prices due to the Consumer Duty, compared to planners who are part of a network (22%).

The research, which surveyed 339 financial planners, also found that financial advisers may feel they have no choice but to increase fees to maintain profitability as 44% said they believed profitability would decline as a result of the FCA rules, while only 5% said that profitability of their firm would increase.

Commercial proposition director at Quilter, Jenny Davidson, said: “The implementation of the Consumer Duty has provided a useful reminder to advisers to evaluate their offerings and importantly price their services accordingly for different client segments.

“The fact that almost a third of advisers are saying that fees will likely increase may be a reflection of the costs associated with adapting to fulfil the requirements of the duty, particularly where those costs are borne without wider network support.

“Increasingly, advisers are favouring a more flexible approach to fees models to tailor for the needs of individual clients or client segments, and the facilitation of tiered adviser charging on platforms is playing a significant role in this.”

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