Gemma Livermore: Hello and welcome to another episode of Seismic Sessions, where today we’re going to explore the latest trends in wealth management. Today, joining me, I have Rachael. Hi, Rachael.
Rachael Rowe: Hi, Gemma. Great to be back.
Gemma Livermore: Great to have you back. And we’re also joined today by Tom Howard, who is a Financial Services Regulatory Lawyer at Vanquis Bank and also at FCA.
Thomas Howard: Hi, thanks for having me.
Gemma Livermore: And finally, we’re joined by Anthony Scammell, Advisor and Client Services Director at Quilter. Hi, Anthony.
Anthony Scammell: Hi there. Thanks for having me also.
Gemma Livermore: Awesome. And today we’re going to be discussing how wealth managers should handle the FCA’s new consumer duty, which I’m very interested in discussing. We’re going to focus on leveraging technology for compliance, the benefits of the new regulations from a consumer perspective, and then also look at practical steps for implementation as we look forward. So let’s dive in. And as our regular listeners know, we start each podcast with the question of what does enabling financial services mean to you? And today we look at that in the context of the new consumer duty. So Tom, what does enabling financial services mean to you?
Thomas Howard: I think enabling financial services certainly from a consumer duty perspective and, and bearing in mind the ability of, technology to kind of improve and drive positive customer outcomes, covers a number of things. I think that you know, one, particular focus in one particular area, you know, where these things can be enabled by technology, is in providing better value for money, and driving efficiency within businesses, which is, you know, a win for business and a win for customers as well.
Completely agree. And Anthony?
Anthony Scammell: Yeah. So for me, the whole realm of consumer duty, which obviously is all about ensuring customers get good outcomes. And I think that the areas that resonate most to me from a customer’s perspective is clearly the customer understanding and the customer support.
Obviously the duty covers services, products, price and value and some other cross cutting areas. But on those two particularly, if you can help the customer understand the products they bought, if you can provide them ever better levels of support for what they’ve purchased through you, then obviously that is a going to give them confidence and trust in the sector, but also, you know, the wind there being that they’re more likely to give you a bigger share of their wallet too.
So everybody wins through that.
Gemma Livermore: Completely agree. And Rachael, how do you see enabling financial services when it comes to consumer duty?
Rachael Rowe: Yes. So in the context of consumer duty, to me, it means really bringing together the entire go to market functions of an organisation in support of a best in class client experience. So really being able to personalise and contextualise every interaction that that client has with an organisation, and to be able to do that in a repeatable way, in a consistent way, and at scale.
Gemma Livermore: Yeah, completely agree, especially when it comes to consistency, which I think is what consumer duty is going to bring all across the board. Okay, so let’s dig into this conversation by looking back at the tremors. And that’s where we look back at how wealth management operated before these new regulations. What did the landscape look like and why was it necessary to make such a significant change? Rachael, if we can come back to you first, can you explain the traditional approach to client care and communications in wealth management and why the FCA felt compelled to introduce the new consumer duty?
Rachael Rowe: Yes, I think it’s kind of the continuation of a trend that we’ve seen, in terms of the types of regulations that the FCA has been supporting over the last, sort of five to 10 years, but I think consumer duty is a game changer for financial services because it’s really focused on outcomes. So financial firms now have to design everything.
So product, services, information with the customer’s needs at the forefront. And I think we don’t have to look too far back to see what’s kind of prompted this shift. I think, if we look at the regular survey that the FCA publishes every couple of years, called Financial Lives. And I think the last one was in May. 2022. And these surveys look at consumer attitudes towards managing their money, the financial products they have, and their experiences of engaging with financial services firms. And in that last survey, only 41 percent of adults had confidence in the UK FS industry. And I think addressing this, was a main motivation for consumer duty.
Gemma Livermore: I mean, that is a big motivation when you look at figures like that.
Rachael Rowe: Yeah, absolutely. And I think that the FCA see consumer duty is as an important piece of their growth puzzle as they put it. So they’re looking to develop higher standards, healthier competition with the intention of improving trust, supporting growth. And I think also with one eye on the UK’s standing on a global stage. But what it means for us in the industry, and for consumers, I think is the, the days of confusing language, jargon, and kind of hidden terms are over and now it’s all about clarity, of communication and empowering clients
Gemma Livermore: And Tom, if we can come to you, you have obviously direct experience at the FCA, but also within the industry for a long time. I’d really like to understand what you saw as the shortcomings in the previous regulatory framework that the new consumer duty aims to address.
Thomas Howard: Yeah, I think it’s a very interesting question and I think there are very much two schools of thought on this. or certainly there were when consumer duty was first announced as to the extent to which consumer duty was an evolution or a revolution in financial services regulation. And I mean, if you look at some of the key aspects really, of consumer duty in terms of delivering fair outcomes to customers and also the information needs of customers, really, those aspects were already captured to an extent by the pre existing FCA principles.
I’m thinking particularly of Principle six customers interests and Principle seven communications with clients, and I think there was a, there was perhaps a sense in the industry when consumer duty was first mooted, that really what this was, was, a codification of the regulators expectations regarding the existing principles such that you know, were all things that firms should have been doing under the principles anyway, and it was just, clarification really of expectations.
Gemma Livermore: I was just going to say, that in mind, the fact that this should have already been, you know, adhered to under Principle 6 and Principle 7, why do you think the FCA felt the need to bring out the consumer duty?
Thomas Howard: So I think, there was definitely a, an inconsistency of approach and application, to the principles, you know, and, and, and this is not just in terms of the wealth management sector, but across financial services as a whole. But I think what we’ve seen actually as consumer duty has evolved and, sort of the implementation that was rolled out is that actually we’re seeing a much more active regulator, and we’re seeing the nature of it is more substantial than perhaps we expected when it was first announced and more far reaching in terms of its effect Yeah
Anthony Scammell: Yeah, I think I think Tom makes a really valid point there because I remember when the duty was first published back in 2020, I remember thinking personally that it was just going to be an extension of treating customers fairly and, you know, should have been around for a good number of years beforehand.
Anthony Scammell: Obviously, what we can now see with the duty is the extension out to the products and services, the prices and value that obviously the, the extension of the emphasis on understanding support, but also firms having to think much harder around is culture and the foreseeable harms that customers can, can experience.
And also the fact that the boards of the, uh, institutions have to also effectively attest, well, it’s not really attest, but appraise of how well, you know, the duty is embedding.. So I think actually the regulator sort of wrapped its arms around much more than was there before, and really making us all in the industry think customer outcomes, think customer needs and evidence, probably much harder than we did before, that we are delivering those outcomes and that we are actually running our businesses with the customers outcomes in mind.
Gemma Livermore: Yeah, and I think the evidence part is showing as a big change in the industry where people are having to evidence what they have done. But for our listeners that haven’t been in the industry perhaps as long as us four have, could Anthony, could you perhaps embellish on what the previous client interaction models failed to meet in terms of client needs and expectations in the wealth management industry?
Anthony Scammell: So. I think, you know, it was touched on just now. Lots of regulation was there, and well, the requirements were there, but what wasn’t there was this evidential point. And, and I don’t recall that our boards certainly had to engage to the level they have now know. Our board needing to have a customer champion and that, the whole board assessing, you know, across across the breadth of the company that we are doing to the duty. I think that actually puts a whole new emphasis on, as I said just now on customer and on, how we measure and deliver those outcomes that previous regulations are, you know, Tom mentioned inconsistently applied, open to interpretation in many ways. Whereas now, you know, whilst it is still principles, I think they steer us much tighter to the outcomes that regulator has in mind for, for what it expects us to do when delivering outcomes to our customer base.
Gemma Livermore: Yeah, and I think it’s really good to understand those reasons behind the changes because it really sets the scene for where we are now and why they have wrapped their arms around us. So that brings us really nicely to the epicentre part of our podcast. So here we start to look at what things are like now, how are wealth managers are adapting to the new consumer duty. And to your point that you just made there, you know, there has been an inconsistency in past. So how are they adhering to the new tighter steering, let’s say.
So Rachael if we can come to you first, and perhaps look at how wealth managers lean on technology to ensure compliance with the FCA’s new consumer duty from, say, recording meetings through to ensuring everything’s complian
Rachael Rowe: Yeah, absolutely. And I think because consumer duty isn’t a tick box exercise, and I think, you know, there is a need to ensure consumers interests are kind of central to your culture and that often requires a shift in behaviors as well as in, in the culture.
And I think this is really where enablement technology comes to the fore, because it allows advisors to take a more client oriented approach. I mean, I think what we see is that wealth managers have to demonstrate with clear data that they’re working towards their client’s financial goals. It’s not kind of a one and done, but there needs to be a continuous monitoring process and that lends itself naturally to a technological, solution. And, I think that means really logging calls, meetings, interactions and monitoring the effect of what’s discussed in those meetings and the products and content on that consumer, that client experience. So if we take kind of the meeting piece of this, for example, I think what we see is that delivering good customer outcomes, it needs a new way of delivering value. So we’re working with a lot of organisations who are really looking to leverage technology to streamline meeting prep, presentations, follow up after the meeting so that sales professionals and their advisors, can really have a playlist of content, content which is already, deemed to be compliant, you know, you have a single source of truth as an organisation, which is a foundation piece, and then through that, that meeting monitoring, that, that suggestion of content to share, auto generated meeting summary, using AI as, kind of an accelerator to, ensure client personalisation and a kind of a, an audit trail, if you like, as to the effectiveness of what’s been delivered at that client interaction and evidencing what’s been delivered in that client interaction.
Gemma Livermore: Completely agree. And Tom, if we can turn to you at this point and look at what are the key parts of an effective compliance strategy under the new consumer duty?
Thomas Howard: That’s a, very good question. I mean, I think there’s sort of various ways that you can look at how you deliver good outcomes under, consumer duty. So one is in terms of, you know, demonstrating that the that firm is complying with all of its regulatory obligations and the, sort of, the internal compliance framework and making use of innovations in RegTech to help firms reduce the cost burden of compliance and improve reporting and record keeping. And then you’ve got this, sort of, customer facing aspect of service delivery. And I think one of the interesting things for me, certainly as it pertains to wealth management, although it’s, it’s definitely, uh, an issue across financial services is these, sort of, macro issues you’re dealing with from an economic perspective. You’ve got the, you know, the cost of living squeeze, which is, um, I think less relevant in the wealth management space, but in the consumer lending space is huge. And in the in the mortgage lending space is huge. And then in, in the wealth management sector specifically, you’ve got this kind of, intergenerational wealth divide, where you have a concentration of wealth at the older end of the age spectrum and then younger generations having more of a wealth disparity to their parents and grandparents generations than than than was the case that when they were at a similar age. So one of the things you’re seeing from a demographic perspective is a concentration of wealth amongst older generations and a greater and growing disparity of wealth between, younger generations those older, you know, baby boomers. And, certainly, you know, millennials and Gen Z individuals are less wealthy than their parents or grandparents generation were at a similar point in time. So there’s a, there’s an impetus, and a sort of regulatory push to kind of, do more with less and to make people’s money work harder. And I think, I think one of the things that technology can do in that, space is through things like robo advice, being able to address the needs of customers lower down the wealth scale. I think there’s always going to be room for, face to face and room for you know, the human interaction element of wealth management, but I think that that is going to be higher up the wealth scale. Whereas I think when you’re, when you’re dealing with wider market and younger generations who, you know, presently, you know, experiencing this wealth disparity, you know, you need to find efficiencies. And I think, where you can reduce the amount of human input.
Gemma Livermore: I completely agree. And I read recently in the FT about the current wealth transfer that’s about to happen and how that will also affect how we manage wealth for people, so completely agree with what you’re saying there, Tom. When you look at technology to plug that space, what do you think is the most important area to change and how quickly do you think companies need to, or wealth managers need to impose that?
Thomas Howard: I think, in terms of the advisory aspect of wealth management, I think that, um, Robo advice, automation of customer service processes, using more smart chatbots, et cetera, to engage with customers and reduce headcount needs to service a greater pool of customers is, the obvious one. I think also that the direction of travel, across all financial services is portability. And, you know, we saw it first with, you know, current accounts, the current account switching service. We’re seeing it coming in pensions with the pensions dashboard where, the regulators want to encourage competition by making it easier to move between providers and data portability is a big part of that.
Gemma Livermore: I love that idea of how the competition will actually make sure that consumers are getting more for their money as well. I think that’s going to be seen dramatically through the industry. Anthony, if we can come to you at this point from a customer perspective, how do these new regulations improve client experience in your industry experience. What have you seen change?
Anthony Scammell: So I think, you know, I think we were, we were already on a journey with customers where I’m picking up on that intergenerational piece because you have the more traditional customers, perhaps the older generation, albeit actually, mustn’t sort of generalise too much because we also see some of our, you know, older generation customers are actually some of the most tech savvy as well.
But, customers have different expectations of how they want to be serviced now, and customers know they want to be serviced quickly, efficiently. They want it when they want it and they want to consume what’s available in different ways. So you have some customers who will still contact us every day over the telephone, whereas you have others now who are hitting the app very heavily. So I think you know what we’re seeing is and the duty sort of, plays this out. is in delivering good outcomes. Part of delivering good outcomes is dealing with customers how they want to be dealt with. And, then actually making sure that those interactions are Uh, as far as they can be, seamless across the channels, so that if a customer starts dealing with you online and they choose to then do the next stage through a telephone, then the technology you have available should be able to draw that together. So there’s a big piece around that for me. I think there’s also a big piece around customer understanding and the language we use with customers.
Traditionally financial services is a bit jargon full, shall I say, and we use technical language, far too readily in our sector. And others probably say in different sectors too, but certainly in financial services, I think we are definitely, definitely very guilty of it. So one of the things that we’ve been doing, um, is know, how you look at customer testing, which is part of the customer understanding, pillar of the duty. So, how you and how you might use technology within that testing, how you actually test the understanding and then also how you test, the understanding of the verbal communication. So, you know, when somebody talks to one of our agents, they’re also getting a very personalised experience. So how do we make sure, through feedback loops, and through technology such as speech analytics, and also go through through the tools that, your own organisation delivers. How do we make sure that that service offering is consistent? The customers are understanding it, and we are meeting the outcome they want because we’re giving them the whole picture, not just a little tiny piece of it. So there’s a there’s a massive piece in there around, aiding customer communication, making sure your staff are well trained, making sure you have a customer centric culture, so that customers do feel when they deal with you, that they are getting a trusting relationship, but they’re also most importantly getting the information they need to make the right decision around their own finances.
Gemma Livermore: Yeah. And I know, Rachael you talk a lot about the bank of trust, and I think that really comes in here, you know, whether you’re looking at it from a generational angle or an inclusion angle, when you look at this wealth transfer to women, that’s about to happen as well. How can you build trust within technology when it comes to this? Rachael?
Rachael Rowe: . That’s a really good question, Gemma. I think it begins by being confident as an advisor that what you’re sharing with a client is compliant, from an organisational perspective, it’s feeling confident that you have a single source of truth that you understand what information is being shared with those clients. And then from a client perspective, it’s feeling that there is a deep level of personalisation in each one of your interactions. So Anthony, you talked about the multi channel experience, it’s being able to, change the channel of engagement and not have to go through a 10 minute conversation to retrace the steps of what you discussed in your last interaction. It’s all of those pieces that together build confidence and then as that builds, trust.
Anthony Scammell: I think trust also comes with delivering what you say you’re going to deliver and making sure that if you say you’re going to deliver something tomorrow that you do, and making sure you are delivering the whole story. So it is, building trust is about making sure that the person who you’re dealing with, whether it’s the customer and advisor, whoever actually has knows they’ve got all of the information, not just a very small bit of it. So no bias in what you’re being told, to make sure.
And I think that it actually goes a long way towards building trust.
Gemma Livermore: Thomas, do you have any views on that?
Thomas Howard: Yeah, I mean, it’s, it’s all very good points raised. I think as well in terms of focusing on the information needs of customers and making sure that customers understand, you know, the products that are being recommended to them, you know, demystifying financial services and, and, you know, trying to remove jargon from the conversation so that we’re being heard. communicating in a, style and in a manner, which is much more consumer friendly. I think there’s a benefit there from a, compliance and a sort of firm protection perspective, because, you know, the more your customers understand the products and are comfortable, you know, in making decisions and feeling informed about the product, and more that you can kind of demonstrate and capture all the steps you’ve taken to aid consumer understanding, the more protected you are against, miss selling claims, down the line and I think that there is a an element of the regulator’s protect consumers that could risk sort of erring into moral hazard, and I think that the emphasis is a lot of times with investment advice is almost to prove that your advice was, absolutely suitable rather than for the customer to prove that it was unsuitable. So the the burden of proof from a regulatory perspective, almost seems to be switching there. And so I think the extent you can capture. and record the steps you’ve taken to help the customer understand and to demonstrate the customer had strong understanding of the products that are being recommended, the more protected you are against, you know, potential future claims.
Gemma Livermore: Completely agree. And I think it’s really clear that with this new customer centric approach, that technology is going to be pivotal to its future success. But what I’d like to ask all of you at this point is, do you think the industry is ready?
Rachael Rowe: That’s, that’s, uh, that, that’s a really salient point because I think there’s tremendous demand on the advisor now to be so well informed, about so many different investment products. I mean, we’ve seen a rise in digital assets. ESG, for example, has had a big focus on it as well as, you know, being able to personalise every interaction that they have. So there is, there is a lot on, on the advisor’s plate. So I think that there is a, a genuine need for the these micro training capabilities to allow the, the advisor to upskill when and where they need in the context of every interaction that they’re having, kind of on, on the job learning, if you like, but really in a way that enables them to be more effective and efficient, and have confidence in what it is they are relaying to the client. and from an organisational perspective, feel confident in your people that, you know, they are truly experts in their field and you, you’ve given them the tools that they need to be the expert in their field, so I think there’s definitely a gap there to be addressed.
Anthony Scammell: I think, you know, make a good point there, Rachael because it definitely comes down to making sure you have the tools available to be able to provide that information. So whether that be to the advisors, to your telephone teams, to the customers through the written word, making sure that, you know, your knowledge bases are consistent, making sure that the tools, and the training materials are easily accessible
Gemma Livermore: Okay, that takes us really nicely into the next part of our podcast, which is the aftershocks. And this is where we look forward to the future and discuss the future implications of consumer duty.
We’re going to look here how wealth managers can break down those silos, particularly in marketing sales and services to meet the new consumer duty requirements and drive success. So Rachael, if we can turn to you first, what strategies can wealth managers implement to break down those silos between departments?
And I know you mentioned at the beginning, that’s what you saw as enabling financial services. So I’m sure you’ve got lots to talk about here to ensure seamless end to end customer journey.
Rachael Rowe: Yes. Thank you, Gemma. And I think building on what Anthony was discussing, really, I think now is the time to lean in on technology that empowers your entire customer facing organisation. So not just the advisors, but also marketing, data, and all those other elements of the organisation that really support the go to market motion. And I think that what we’re seeing is that really financial services is catching up with what other industries have been doing for years with with enablement tools. So industries such as tech or healthcare, for example, where delivering a best in class customer experience, is really an opportunity to educate or upskill the staff, and they really see enablement tools as a way to connect with the new generation, collect invaluable data, personalise interactions, deliver impactful meetings, and really showcase their expertise in their area. So I think it’s tying together all of those elements of a client journey, if you like, by having a cohesive technology stack underlying that, which removes those points of friction and creates more efficiencies across the organisation And interestingly, with consumer duty, then compliance becomes an important part of what organisations are doing, but it’s not so much the focus. And I think if we, look forward and we look to AI and the potential for AI in the mix, really looking at how AI can power personalised training, to ensure employees are always up to speed. And then, you know, building that expertise and trust that we’ve talked about, and then, using call and meeting logging with AI, auto generating notes, summaries, content. I think the list goes on how AI can then really embed into those workflows. So it becomes a very targeted, surgical use of AI to really drive efficiency throughout the business, but underpin best in class client experience.
Anthony Scammell: so I think Rachael makes a really interesting point around AI, I think at this stage many of us don’t really understand exactly how we’re going to integrate. We know AI will have a place. We haven’t quite determined the extent to which we’re going to use it. But certainly, you know, something Rachael said really resonated with me because one of the early applications we see is to be able to have the AI supporting our telephone agent in terms of making sure that they are providing the right information, as Rachael said, making sure that the call notes are reflective of the conversations and making sure that we capture those important actions that we say we’re going to take and being able to pull up the information. So the agents or or our financial advisors are actually providing the correct information using the right tools to assess the customer needs to make sure that we can track the outcome. So think I does have a very exciting future for us, as part of a bundle of lots of other bits of technology as well. You know, so the training suite, all the good recording of everything, enhancements to the client database, using it to help us capture our KPIs and learning from the KPIs. I think a big part of the duty, for us reviewing all of our KPI suite to make sure we had the, right customer lens and also then tools beneath that to be able to, pull off that data and be able to analyse it to make sure we are actually delivering the, outcomes that we think, we are, and we have seen one or two places where we haven’t, we’ve seen results that we weren’t actually expecting, for good and for bad. And I think, you know, without the technology, that would be impossible. So I think, you know, looking forward AI or other advances in technology, because obviously it’s coming fast and furious, are actually key to us being able to embed the consumer duty ever more and therefore giving customers ever better outcomes
Gemma Livermore: Yeah. I completely agree. And I think if we go back to Tom’s point earlier on in this conversation, it not only helps us to ensure consistent and compliant customer experiences, but it will also help when it comes to that competitive angle where we’re dealing with clients that are more likely to change where they’re managing their wealth And it enables us to experience that from a competitive angle as well. Would you agree, Anthony?
Anthony Scammell: Yeah, absolutely. 100 percent agree.
Gemma Livermore: Okay, so I think we can definitely say that by breaking down silos and leveraging technology, wealth managers can not only comply with the FCA’s new consumer duty, but it’s also going to enhance that customer satisfaction and drive growth, which I think is going to be really exciting as we look forward.
What I’d like to do here is, um, If we can just start to make a conclusion of our discussion today, perhaps if we can summarise some of the key recommendations for wealth managers, so that we can talk about how they can best handle the FCA’s new consumer duty effectively. So giving our listeners those takeaways, if you like.
Rachael, what next steps can wealth managers take if we look at, you know, practical steps that they can take after listening to this podcast to leverage multi experience and enhance client engagement using technology?
Rachael Rowe: Yeah, I think for for wealth managers who see it as an inconvenient burden, it promises a mountain of extra work, but I think for those who see regulation as positive, it’s a unique opportunity to look at how other industries are using enablement technology and look at how they can use it, again, as I’ve mentioned before across really that whole customer base. So, how they’re engaging with clients in the first place, that they have a single source of truth for all of the content that’s being shared, so that they know that it’s compliant, and they have control over what versions are being shared with their client facing folks, I think, in terms of really understanding how to deliver impactful meetings on that, that’s across the whole kind of range of the, you know, the preparation meeting itself, which is often a black hole. And then what happens behind the, scenes. Post meeting, Anthony talked about trust and how that is really important to follow up in the right time frame with the right information, maybe using things like digital sales rooms in order to do that. And then the whole kind of learning cycle that goes around that so that you make sure that your folks are always up to date. I mean, we’ve seen tremendous change, the changes are constant in FS, but we have really seen tremendous change in terms of the economic environment, geopolitical landscape, not to mention the actual instruments themselves that advisors need to be on top of. So I think having a mechanism to be able to make sure that your folks are well prepared for whatever conversation they move into
Gemma Livermore: Yeah, completely agree. And I’d like to come to you, Tom, on that one. When it comes to learning, you know, how do we ensure that all of the staff and all of the wealth managers within an organisation know how to work across the intergenerational piece that you mentioned? What’s the best practical steps that our listeners can take for that?
Thomas Howard: Yeah, a good question. I mean, I think, e learning and e training has been around for a long time. I think that’s probably what the more tech led businesses and the, and the innovation in technology is going to do is, really allow advisors to pull market data, performance data and kind of synthesise that much more efficiently, and I think that talking about the sort of the wealth gap and different generations the value scale of the customer base. I think what you’re going to see is, more automation in the lower end of the value chain, and then more support for human advisors you know, leveraging the power of AI, uh, and data analytics, to support the higher end of that chain. So, I think it’s going to split into two camps, depending on, you know, the extent to which your business is focusing more on mass affluent rather than, I guess, your traditional high net worth individuals.
Gemma Livermore: Completely agree. Anthony, if we come to you, for a practical takeaway, how quickly do you believe that wealth managers have to act in order to start implementing that consistent experience?
Anthony Scammell: I actually think we need to be acting now. I think the, the duty when it came in, had its first deadline as the 31st of July last year for open book, closed book, for the end of July this year. Obviously the board assessments needing to be done for the first time by 31st of July this year. I think actually we need to act now and I think we need to be making sure that we are, I mean, there there are so many different fronts that we need to act on It is about understanding where you’re going to get the most value for the customer base and for you as an organisation So part of this note, we need to understand insight.
We need to understand the data. We need to train our people most appropriately. We need to increase our record keeping. All of these things we’ve touched on, but actually we need to be pulling those together and harnessing them. And we need to be moving forward at some pace now, because I think the regulator has been talking to us now for some time around this duty. And they made it very clear through the various dear CEO letters of their expectations. And I think they have an expectation And quite rightly, of rapid progress. And I think therefore we, as an industry, need to move forward very quickly to deliver that.
Thomas Howard: Yeah, I echo those sentiments. I think, you know, the skeptic in me does worry, you know, when we talk about customer outcomes, particularly in the wealth management context, you know, investing is not without risk and it is not the role of financial services firms to remove risk from the investing for its customers if it, you know, if such a thing were even possible, or to underwrite that risk, you know, in terms of, their liability under DISP and remediating customers. So I think it’s understanding that the products that a customer is directed towards reflects their risk appetite and that they’re making informed investment decisions. But I’m, I’m slightly wary of, you know, consumer protection regime that is so focused on the consumer that it removes the sort of moral hazard element of, investing and, and, you know, customers need to be aware that by investing in certain products, you know, there is a risk to capital. So, you know, it’s making sure that those decisions are informed ones, and making sure that, you know, the products and services that are being promoted to customers are appropriate for them, you know, both in terms of their understanding, but also their risk appetite.
Gemma Livermore: yeah, I completely agree when it comes to moving forward quickly. I really hope that our listeners have learned a lot from today. I know I have about how we can navigate the new regulatory landscape, improve client outcomes and also achieve sustainable growth. Um, any last words of wisdom from any of you before we finish up?
Thomas Howard: Yeah. So one thing I wanted to touch upon is, there’s obviously a degree of uncertainty going forwards, you know, we’ve got election coming up as to the extent to which any incoming government is going to perhaps place some curbs or or guardrails around the sort of regulatory creep, that potentially seeing and and the extent to which the FCA is is is potentially moving from being a conduct regulated, being a pricing regulator and how, aggressive it may be in terms of, you know, the pricing and, the scrutiny it places firms under and, and, and the amount that, firms are going to have to justify their, fees. You know, so it’s going to be interesting to see whether this kind of increasingly confident and robust, FCA, that that, that’s kind of flexing its regulatory muscles at the moment, continues and, perhaps even increases or whether we are going to see perhaps a slight reining in of the regulator and, and, and the financial on and, service because, clearly all of this does have a cost impact on businesses and ultimately that cost is born by the consumers as well.
Gemma Livermore: That’s fantastic insights there, especially in this current climate. So thanks for sharing that. Anyone else?
Rachael Rowe: . So from my perspective, I think that you know, the real goal is happy clients. And I think that this presents a tremendous opportunity for organisations to use technology to really empower and assist their go to market teams and to cut challenges instead of corners.
Gemma Livermore: Completely agree with you there, Rachael. I think that’s the whole point of bringing this duty in is to ensure that there is consistency and no corners are cut.
Anthony Scammell: You know, with or without, the duty, it is a responsibility of all of us in the industry to be thinking about our customers and to be doing all we can to deliver good outcomes to them. So I think all the duty does in my mind is put a real focus on what actually most of us are endeavoring to do anyway, and just adding more of a structure around it. But you know, for all of us in financial services, we should be out and seeking always to deliver good customer outcomes. So, I think it shouldn’t be revolutionary, it should be evolutionary, and we should always be striving to do the right thing anyway.
Gemma Livermore: Completely agree. And now for the hard part of this podcast. We always end every podcast by asking you each what your one word takeaway is and then a short sentence to explain it. So Rachael, if we can come to you first.
Rachael Rowe: For this one, my word is going to be enablement because I really do feel that this is an opportunity to lean in on how you can enable your go to market teams to do all the things that the consumer duty is requiring, but in a way that’s efficient and effective and makes sense at an organisational level.
Gemma Livermore: Great word. Anthony, what’s your word?
Anthony Scammell: My word drills on that. I’m going to say consistency, consistency of approach, consistency of use of data and making sure that the tools you use consistently come together to deliver the outcomes you’re striving to
Gemma Livermore: Great one. And Tom?
Thomas Howard: I think mine’s going to be efficiency. I think efficiency is the thing that’s going to underpin driving value, but also, customer understanding in terms of, efficiency of delivery of information. You know, we’re increasingly, time poor, focus poor, and so being able to deliver that information in, in a way that’s easily ingestible you know, can be ingested in bite sized chunks is, is also important alongside the kind of base efficiencies of, of just trying to make the business model work more effectively and do more with less.
Gemma Livermore: Completely agree. Um, I would say that my word of today would be evidence . And that is because I was listening to Tom and Anthony speak about the fact that this is what we should have always been doing. It’s what, you know, every company wants to be doing is keeping their, their customers happy. But now I think the real change with consumer duty is the need to evidence what you’re doing.
In order to do that. So yeah, that would be my word of today. Thank you for joining us. I could have gone on forever, but we have to keep it short for a podcast. thank you, Tom and Anthony for coming and imparting your words of wisdom today. I found it really interesting and I’m sure our listeners have too.
And to the listeners, thanks for tuning in again. And until next time.
