Consumer Duty – How Conquest Can Help You Prepare

Spurred by the advent of transformative technology, the financial planning industry continues to evolve rapidly. Technology has emerged as a powerful tool that can empower consumers to make informed decisions about their finances, whilst providing an effective ‘intelligent assistant’ for financial advisers to build client plans more efficiently, quickly, and cost effectively. Technology will help bridge the gap that currently exists between advisers and their clients, helping to foster a sense of trust and deeper engagement. In the process, it may also serve to bolster firms’ compliance with regulatory requirements.

This is particularly relevant for participants in the U.K. financial services sector, for whom Consumer Duty is likely a key priority. Consumer Duty, introduced by the Financial Conduct Authority (FCA), is a set of rules designed to establish “higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.” In some cases, adherence with these new consumer protection standards will simply be a case of firms documenting what they already do. For others, it will be a useful trigger to explore new efficiencies and review how they currently conduct their day-to-day business.?

It’s clear that technology, given its potential to revolutionise the way that consumers approach financial planning, can support this process. With the ability to analyse vast amounts of data, AI-powered financial advisers can provide personalised recommendations based on consumers’ unique financial circumstances. The underlying technology can help consumers better understand the risks and benefits of different investment options, as well as aid them in making better and more informed decisions about their finances and futures.

Technology isn’t the only answer, but it should be an enabler and not a hindrance. With that in mind, let’s explore the intersection of Consumer Duty and the impact of AI, in the context of financial planning and Conquest’s financial planning solution.

The Consumer Duty Act

The concept of consumer duty has introduced a paradigm shift as governments and regulatory bodies around the world seek to ensure that consumers are adequately protected and informed. The FCA’s Consumer Duty has been proposed in the U.K. with the goal of enhancing consumer protection within the financial services industry. Below we list ways Conquest can help you prepare for the various requirements tied to Consumer Duty.

1.?????Consumer Duty states that clients must be able to make effective decisions.??

• Conquest has a Strategic Advice Manager (SAM) that allows its clients to not only calculate the basics, but also to perform stress tests and “what-if” analyses on their plan. The volatility analysis goes beyond simply returning a percentage on the efficiency of a client's financial plan (e.g., ~60%), it also tracks and presents the year and age at which a plan becomes riskier, as well as the strategies you could employ to mitigate that elevated risk.

2.??????Consumer Duty states that clients must understand the value of advice and what that advice is worth.?

• Conquest visually presents the monetary value of financial planning advice as well as its impacts on clients and their lifestyles. This additional clarity and engagement can help to ensure that clients have ownership of the plan and an understanding of the value that they are receiving.

3.??????Consumer Duty stipulates that clients must re-think investor-facing documentation and exactly what data is represented.

• Conquest offers its clients a fully customisable and interactive digital story outlining the financial plan, as well as PDF documentation if a more static set of documentation is required.?At its most efficient, the plan can easily be presented live to clients by leveraging SAM to act as an intelligent assistant, removing the heavy lifting involved with building outputs and the trial-and-error style of creating multiple scenarios.??

4.??????The FCA has stated that as part of Consumer Duty, firms must monitor, test, and?adapt their practices and processes on an ongoing basis, to ensure they are delivering the best outcomes for their clients. The FCA wants to see the data in order to evidence the outcomes.?

• Conquest has bilateral API capabilities that allows data to flow freely from the Conquest platform to other upstream or downstream platforms. In addition, Conquest has business intelligence capabilities that allow its clients to aggregate data and prepare bespoke reports for regulatory purposes or internal distribution.???

The need for consumers to make informed decisions about their finances, as well as delivering on Consumer Duty, means that the potential benefits of modern technology for financial planning are closely intertwined. This presents an opportunity for forward-thinking advisers to deepen relationships with clients and forge long-lasting relationships built on a foundation of trust.

?

For more information around Consumer Duty, be sure to follow Consumer Duty Alliance on LinkedIn.

Visit us at www.conquestplanning.co.uk to learn more about how we’re changing the future of financial advice.

Interested in using Conquest? Please visit www.conquestplanning.co.uk/en-gb/get-started and fill out a contact form to get in touch with us.