1 in 10 financial advisers look to quit industry due to Consumer Duty
- On September 13, 2023
- By GrowthInvest Marketing
One in 10 advisers are looking to exit the industry because of the Consumer Duty as more than a third say regulations are harming their mental health, new research shows.
A CoreData study of 267 UK financial advisers conducted in August found more than one in 10 (11%) are considering leaving the industry or retiring because of the FCA’s Consumer Duty. In addition, 35% think the new rules will see more advisers leave the sector than under the Retail Distribution Review (RDR).
Many advisers exited the industry in the run-up to the RDR, which came into effect at the end of 2012.The study shows nearly a quarter (23%) of advisers think the Consumer Duty, which requires firms to deliver good outcomes for retail customers, will reshape the financial advice industry more than RDR.
But almost half (46%) think the new regulation, which came into force on 31 July, is an unnecessary burden for advisers and will do more harm than good. Less than one in five (18%) disagree.
Furthermore, advisers point to the Consumer Duty (22%) and volatile markets (23%) as the biggest challenges facing their businesses over the next 12 months. Interest rates rises (17%), inflation (13%) and the cost-of-living crisis (8%) are seen as lesser challenges.
The cost of complying with the Consumer Duty is a key concern. More than seven in 10 (72%) advisers say the regulation will increase their business costs. And almost three in 10 (28%) say their firm has had to outsource parts of Consumer Duty regulatory compliance.
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