The Consumer Duty became part of our everyday lives in July 2023 with the intention of improving the care and duty we serve to our customers. One of the downsides of such a piece of regulation was to increase the cost to deliver a form of service the industry had been providing for years.
Clients with a smaller pot to invest with lesser needs, perhaps where no contact had been made in years, were suddenly under the spotlight. And that led to what is now a common term I hear in the industry: offboarding.
Research by NextWealth showed 72% of advisers are ending relationships with more clients than usual. In 2024, 66% identified clients they planned to let go, and over half said they expected to increase the pace over the next 12 months. Boring Money found the number of people receiving financial advice fell in 2024, widening the advice gap further.
Research by NextWealth showed 72% of advisers are ending relationships with more clients than usual
The answer to this new problem is multifaceted. You could completely offboard your clients and cease all services; you could try and get value from the back book by selling it to another organisation; you could outsource the care of your customers to another company until they are ready to come back; or you could partner with a technology provider to lower your own cost to profitably serve and nurture those clients yourself.
Tech can reduce the cost to serve
Thankfully, today’s technology does already save you time in the financial-planning process. Annual reviews that took eight hours only a few years ago can now be completed in under five minutes. Digital fact finding and online risk-profiling questionnaires have dragged the quality of service you can provide into modern times, while reducing your cost to serve: a real win-win.
The movement of data between systems is getting ever more seamless, with open API (easy links that ferry data back and forth between systems) becoming commonplace, creating a customer and adviser experience that slashes the time and therefore cost to serve, while dramatically improving the customer experience. The regulator is happy, as automation means records, and records mean easier checking to ensure we are indeed maintaining the Consumer Duty rules.
But the Consumer Duty goes beyond an annual review. What about tailored services, what about value for money, what about clear communication and understanding?
There’s an app for that…
A white-labelled app with hyperpersonalised content: messaging with your adviser; your own simplified cashflow plan to play around with; up-to-date whole-of-portfolio valuation; personal goal tracking; and videos and articles personalised to you, all aligned to your ‘target market’ – this is smart tech.
New Consumer Duty tool launched to help advisers ‘stay one step ahead’
And if we thought great strides have been made in recent history, it’s about to get even better. This is the year when artificial intelligence will make a real difference in our industry, allowing further automation between voice and the written word, helping us make informed decisions even more quickly and letting us personalise our service instantaneously.
So, if you’re thinking about offboarding, think again. The option to keep your customers and service them compliantly, affordably and beautifully is within your grasp.
Yasmina Siadatan is chief revenue officer at Dynamic Planner
