{"id":309450,"date":"2025-08-01T14:20:17","date_gmt":"2025-08-01T14:20:17","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/309450\/"},"modified":"2025-08-01T14:20:17","modified_gmt":"2025-08-01T14:20:17","slug":"two-thirds-of-advisers-raise-minimum-asset-levels-in-wake-of-consumer-duty","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/309450\/","title":{"rendered":"Two-thirds of advisers raise minimum asset levels in wake of consumer duty"},"content":{"rendered":"

Two-thirds of advice firms have raised their minimum level of investable assets since the introduction of consumer duty<\/a> two years ago.<\/p>\n

A new white paper from Dynamic Planner highlighted the cost-to-serve challenges currently facing advisers, and found two in five firms have let existing clients go because servicing them had become uneconomical. <\/p>\n

\u2018Advice 2025\u2019 was published on the second anniversary of the landmark regulation and looked at the extent to which the consumer duty has sparked a mindset change within the industry. <\/p>\n

The report captured the views of 406 advice professionals, including 304 financial advisers, 52 business decision makers and 50 paraplanners, from firms of all sizes across the UK in the first quarter of 2025.<\/p>\n

Role of technology <\/p>\n

It found that despite some firms having to offboard lower-value clients, 72 per cent of advisers said they were serving more clients than they were a year ago thanks to their use of technology.<\/p>\n

In addition, 62 per cent said they expected their client banks to increase by 10 per cent or more over the next 12 months. <\/p>\n

Increases in client banks were most strongly identified among firms with up to 20 employees. <\/p>\n

Chris Jones, financial services director at Dynamic Planner, believed technology would be the most important thing in narrowing the advice gap alongside regulatory initiatives like the advice-guidance boundary review and the review on risk warnings. <\/p>\n

\u201cTechnology will be the most important thing. It just needed the rules to let it be fully utilised in a safe way. Finally cultural change driven by the government, as we have begun to see, and the media, has a vital part to play,\u201d he said.<\/p>\n

Headwinds and opportunities<\/p>\n

Dynamic Planner said the consumer duty was an \u201cundeniable headwind\u201d in achieving the FCA\u2019s aims of giving more people access to advice. <\/p>\n

However, it added this may be temporary as the introduction of targeted support<\/a> could help.<\/p>\n

According to the white paper, 87 per cent of respondents saw either targeted support or simplified advice as opportunities. <\/p>\n

Out of those 87 per cent, half said they were reviewing their client bases for potential segmentation, half were looking at their client acquisition approaches and nearly 50 per cent were evaluating their related technology needs.<\/p>\n

87%<\/p>\n

of advice firms see targeted support and simplified advice as an opportunity<\/p>\n

Jones was asked by FT Adviser whether consumer duty would make it difficult for firms to offer targeted support, as they looked to avoid causing \u2018foreseeable harm\u2019, to which he replied no.<\/p>\n

\u201cConsumer duty is the principle that enables consumer focused initiatives such as targeted support to be implementable in practice. <\/p>\n

\u201cOf course each aspect needs to be considered as you segment customers, identify situations, create and deliver suggestions but that gives you a track to run on and a framework by which harms can be foreseen prior to any communications being made.\u201d<\/p>\n

He added: \u201cFirms will have ensured that [segmented clients] would be better off having been given targeted support than if they hadn\u2019t but are not responsible for any other decisions or actions the individual makes.\u201d<\/p>\n

Data<\/p>\n

Data has become a key focus for firms since the consumer duty, according to the paper, with 85 per cent viewing data as essential or useful for their firm.<\/p>\n

Firms have invested in their technology, joined up their tech stacks and cleaned up their data to meet requirements. <\/p>\n

72%<\/p>\n

of advisers are serving more clients than they were a year ago<\/p>\n

Advice 2025 also found 43 per cent of firms have grouped their clients into target markets since the introduction of consumer duty, with small and mid-sized firms most likely to have made the change. <\/p>\n

In Dynamic Planner, the number of recommendations tied to a target market has risen 146 per cent since August 2023.<\/p>\n

Michael Shand, managing principal at Capco, also reflected on the consumer duty, urging firms to recognise their response to the duty \u201cwill never be done\u201d.<\/p>\n

\u201cThe journey is far from complete,\u201d he said. \u201cWhile firms that have truly embraced the duty and embedded it into their culture are already seeing real benefits, others \u2013 who have approached it primarily as a compliance or regulatory exercise \u2013 have found themselves bogged down in governance-heavy tasks, such as traceability logs and extensive reporting processes. <\/p>\n

\u201cNot only does this mean compliance quickly becomes a slog, disengaging employees, but those taking such a tick box approach also risk missing out on significant opportunity to generate meaningful product and service insights.<\/p>\n

\u201cContinuous improvement is a core expectation and it\u2019s essential that firms see embedding the duty into day-to-day operations as a top priority,\u201d he said.<\/p>\n

alina.khan@ft.com<\/p>\n

Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com<\/p>\n","protected":false},"excerpt":{"rendered":"Two-thirds of advice firms have raised their minimum level of investable assets since the introduction of consumer duty…\n","protected":false},"author":2,"featured_media":309451,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[113256,113257,51,113258,474,8370,2499,16,15],"class_list":{"0":"post-309450","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-advice-businesses","9":"tag-advice-guidance-boundary","10":"tag-business","11":"tag-dynamic-planner","12":"tag-finance","13":"tag-ft-adviser","14":"tag-personal-finance","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114953953220690312","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/309450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=309450"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/309450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/309451"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=309450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=309450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=309450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}