Over a third of adviser firms (37%) have changed their fee structure as a result of completing the Consumer Duty fair value exercise, new research has revealed.
The research, conducted by Royal London and the Lang Cat, found only 3% of respondents had not yet made the required changes.
Overall, 21% of the 160 people who responded to the survey found the changes were difficult, saying that a lot of work was needed to comply.
The Consumer Duty came into effect on 31 July with the aim of setting higher and clearer standards of consumer protection across financial services.
Firms are required to deliver and assess four outcomes under the Consumer Duty, including price and value.
Companies are required to undertake fair value assessments as a way of demonstrating if the price a consumer pays for a product or service is reasonable compared to the overall benefits they can expect to receive.
Last month, St James’s Place (SJP) announced it will remove its controversial exit fees as part of an extensive overhaul of its charging structure.
The move appeared to have been prompted by the Financial Conduct Authority’s increased focus on fair value.
SJP held firm with its charging structure when the FCA first revealed its proposals.
But having come under increased scrutiny in recent months, the firm has had a change of heart.
The changes are due to come into effect during the second half of 2025.
Over two thirds (67%) of respondents agreed the work needed to carry out the fair value assessments has been worthwhile.
The research has also highlighted that only 20% of adviser firms have issued updates to their clients about the Consumer Duty, and more specifically on fair value, 39% of adviser firms haven’t mentioned it at all.
Only 41% said they have mentioned it when prompted by their clients.
Jamie Jenkins, director of policy at Royal London, said: “The Consumer Duty has prompted a great deal of activity from all areas of the financial services industry and, while this may have initially seemed onerous, it’s clear that it is making a difference to how firms operate in the interests of clients and customers.
“Financial advisers are closer to their clients than anyone else in the value chain, so they are very well placed to understand the changes needed to deliver good outcomes.”
Mike Barrett, consulting director at the Lang Cat, added: “If you believed the noise, you might conclude that advisers believe Consumer Duty is a waste of time.
“Reassuringly, our research shows a more positive sentiment, which, I think, reflects the advice sector’s transformation from an industry into a profession.
“Yes, there has been work to do to facilitate this transformation, however the intentions for Consumer Duty are hard to argue against.
“If the regulator can evidence proactive supervision, driving change and taking enforcement action where necessary, as well as helping advice firms understand best practice, we believe this positive sentiment can improve further.”
Overall, 160 responses were received – with 69% of respondents describing themselves as either a financial adviser or financial planner.
The remaining respondents were split across paraplanning, administration and compliance roles.
Altogether, 72% of respondents are part of a directly authorised firm, with a further 16% being network members.
The focus the ‘Consumer Duty’ places on the measurement of client outcomes will be useful for firms and customers alike. In the advisory space at least, it seems unlikely that could not have been achieved as part of the obligation to ‘treat customers fairly’, ditto the removal of provider exit charges etc. What concerns me is the amount of time, energy, human and financial resource devoted to this at a difficult time for investors and whilst enforcement of so much existing investor protection appears to have been neglected.