What Does Consumer Duty Mean For Adviser Communications?

Consumer Duty is on every financial services firm's agenda. We've had lots of incoming questions about how the guidance relates to digital communications, so we asked Carole, our superstar head of network sales, what Consumer Duty means for adviser-client comms.

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Key Takeaways

• Understand the impact of Consumer Duty on adviser-client communications in financial services.
• Explore how to cater to the diverse communication needs of different clients under Consumer Duty, including vulnerable individuals.
• Discover technological solutions for secure two-way communication in compliance with Consumer Duty.

Interview Summary

Q: For anyone who doesn't know, what is Consumer Duty?

A: Consumer Duty is quite simply a new set of rules developed by the Financial Conduct Authority and it aims to provide better protection for consumers across the financial services industry.

Q: What does the guidance say about adviser-client communications?

A: The Consumer Duty aims to deliver clear and understandable communications, services that meet consumers' needs and offer fair value, and support when consumers need it.

Good lines of communication and easy communication are crucial for all of these requirements. Consumers should be able to easily get in touch with their adviser and vice versa.

Communication is absolutely key. If it breaks down, the whole process can potentially break down. Email is a top choice for communication, as I think most people are comfortable using it.

Q: Does email factor into those key Consumer Duty outcomes?

A: We want to provide information directly to clients in the most frictionless way possible. Email is a familiar and efficient way to communicate with people of all ages. It's a straight line to their inbox, and it gets information to them quickly.

I think email is also more personal than some other forms of secure communication. It's a person sending a message to another person. The only thing that might be better is a phone call, but that's not always as efficient during the working day.

Email provides a personal touch, and it can still keep data safe while humanising the engagement.

We all know how frustrating it is when we come across a bump in the road when trying to do something. We're put on hold for too long, or the portal we're trying to upload a document to doesn't accept the format. As soon as we hit a bump, we crumble and give up.

I check my email every hour, whether it's personal or business. I have other messaging services, but I don't check them as often.

If I was in a business transaction, I would expect information to be sent to me promptly by email. When we buy things in a shop, we're often asked if we want a receipt sent by email. This is because businesses want our email address so they can send us information.

They don't ask for our WhatsApp address or our Messenger details. Email is still king when it comes to engaging businesses with clients.

Q: What do advisers need to be aware of when it comes to emailing their clients?

A: I think everyone is aware that GDPR has been around since 2018. We all know that we should not be sharing personally identifiable data in email.

We know this happens, because as consumers we receive things that we're quite shocked to still receive in open email. So, we really shouldn't be doing this anymore.

Cybercriminals are getting more and more clever. We know the value of that data is very high, and so any businesses where there is a feeling that anything might be going out still by open email, that really shouldn't be happening. Especially with the kind of response times that we're expected to work to these days.

I think it's important that we not only encrypt data when it's sent in open email, but that we also verify that the recipient of that information is the correct recipient. I think that's really, really important.

This is where we see the most data breach reports to the Information Commissioner's Office (ICO). So any business looking at a solution to secure their email communication needs to look at a high standard of encryption solution, but also something that makes sure information is delivered to the right person.

You want to protect staff from the human error mistakes that we can make. You want to give them the tools to do the job to the best of their ability whilst maintaining really efficient communication.

Once you've decided that secure email is a good fit for your business, to augment or complement any other kind of document sharing portals you might have in play already, you really need to look for something that mimics email - normal email as closely as possible.

You want something that gives the protection to your employees, but is easy for them to use so that they're going to want to use it, but also really easy for their recipients to access that information as well.

Q: Does Consumer Duty make it especially important to support vulnerable clients?

A: Yes, and I think we can all identify with vulnerable customers. At some point in our lives, we can all be vulnerable. We sort of dip in and out of being vulnerable, if you like. For example, someone who is not considered vulnerable might suddenly be going through a divorce. And of course, they become very vulnerable and need to be treated as such.

I think email has the ability to be a human form of contact, especially with something like Mailock, which is two-way secure communication. A vulnerable client knowing that they can easily communicate with their chosen financial adviser, their trusted adviser, via email and securely, with personal information relating to their personal changing circumstances, is really, really important.

We certainly don't want any of our clients feeling like we're difficult to get hold of. Again, a secure email solution is really useful, keeping those lines of communication flowing and open. And I think for vulnerable customers particularly, this is of real value.

Q: Why is it important to make sure secure communications can flow two ways?

A: When a business uses Mailock secure email, they can offer the technology to their clients for free. This means clients can respond and reply safely, as well as compose five secure emails per month to other parties.

This is valuable for financial transactions, such as mortgages, where clients may need to communicate with multiple parties, such as a financial adviser, solicitor, and estate agent. By using Mailock, clients can be sure that their data is secure throughout the transaction.

For example, when it comes to estate planning, clients may want to share information with family members. Mailock allows clients to do this securely, without having to worry about their data being compromised.

It is important for businesses to ask their clients how they want to be communicated with. Not all clients are the same, and some may prefer to communicate securely. By offering Mailock, businesses can show their clients that they value their privacy and security.

Q: What's the most important takeaway from Consumer Duty that relates to client communications?

A: If you're not giving your clients the ability to receive or deliver communications safely and easily to their adviser, you're not meeting the Consumer Duty requirements.

We all have different needs, so take a snapshot of your entire client base and make sure you have options available that suit everyone.

One size does not fit all. We come in all shapes and sizes, and we have all different requirements. Some of us will be very comfortable with new digital interactions, while others will prefer more traditional methods.

It's crucial that you communicate with your clients in a way that they want to be communicated with, and that you have the technology to do so.