A piggy bank with a sad face, surrounded by colourful speech bubbles

I read with interest this article from Financial Reporter that states, 'Over four fifths (80%) of [financial] advisers believe the [Consumer Duty] regulation has made it harder for them to service clients. In particular, this is impacting those with low investable assets and over half (55%) have stopped serving them as a result.'

First of all, what's the Consumer Duty? And secondly, why would something that should be making financial advice easier to access, actually be making it harder for some?

So, Consumer Duty is a new regulation brought in by the FCA to ensure that financial advisory firms (mortgage advisers included), analyse their processes more stringently and ensure they are charging customers the correct amount. Of course, TCF (Treating Customers Fairly) held that function, but apparently not strongly enough...

The outcome appears to be, contrary to what you might think of reducing unfairly high fees, the Duty is actually increasing client fees... This could be due to the added processes of analytics that your adviser has to go through, and/or increases in their own business expenses.

Consequently, some people are finding it harder to access sound financial advice because those advisers are finding it harder to justify charging them.

The fact that 'The survey found that just 9% of people now pay for financial advice, down from 11% in 2023', interested me even further at how surprisingly low the number of people who are paying for advice really is.

Of course, not everyone HAS to pay for financial advice, especially in the case of mortgages. As you know, fee-free advisers like me are equally stringent in our conduct and compliance checks and the added analytics processes enforced on us by the Consumer Duty doesn't affect our business models - for now, for some anyway.

I would like to confirm that where MK Mortgages is concerned, the Consumer Duty will NOT make me change my mind on offering fee-free mortgage advice. Regardless of how large or small your mortgage or remortgage may be, I will continue to offer mortgage advice to all who need it, within my fee-free business model.

My time and costs will remain paid for by the commission all mortgage lenders pay their advisers.