The latest annual adviser survey from RSMR, the fund research and MPS business, reveals growing challenges for UK investment advisers in meeting Consumer Duty compliance.
It shows that 71% believe it is more difficult to meet and document Consumer Duty requirements for client investments managed outside their centralised investment propositions (CIPs) or approved panels.
This marks a significant rise from 58% in Q3 2023.
Additionally, the proportion of advisers finding compliance “a lot more difficult” increased from 20% to 33% over the same period.
The survey data highlights the impact of heightened regulatory scrutiny, with advisers increasingly concerned about adhering to standards for non-standardised investments.
This suggests the need for process improvements or further resources to effectively manage these compliance challenges.
James Senior, head of business development and marketing at RSMR, said: “Advice businesses have had to deal with significant regulatory changes and cost pressures, and some are challenging their CIP. Does it create good outcomes for their clients, allow effective client meetings and help them to run a profitable business?
“Add in ‘off panel’ products and legacy business, and many advisers are finding that it’s not necessarily easy to run their overall investment proposition in a way that satisfies all of the Consumer Duty requirements.”
Research in Finance UK Advisory Study (UKAS) project lead Jon White added: “Our research shows advisers see meeting and evidencing Consumer Duty requirements for client investments managed off approved panels a substantial challenge.
“The difficulties most cited are demonstrating fair price and value requirements, as well as performing the necessary level of due diligence on the investment providers.”
The findings from RSMR are based on a Q3 2024 survey of 163 advisers, undertaken by Research in Finance.
Stick then to your CIP or approved panel. Any reason/s for not doing so should be relatively straightforward to identify and document.