There will be some “trial and error” as advisers get to grips with what fair value means under new consumer duty regulations which come into force next week.

After a year of preparations advisers will have to comply with new consumer duty regulations from Monday (July 31).

But there will be some “trial and error” when it is first rolled out as advisers understand just what fair value means, says the chairman of a data intelligence firm.

Mike Ward from Armalytix said: “It is a really interesting development but it is going to be hard because it is about providing a better outcome, so we’ve got to make sure we know what a better outcome is.”

Ward added that the hardest part of the new regulations was the subjective nature of what fair value, one aspect of consumer duty, means.

He added: “Advisers have always had the obligation to provide fair value but it will now be turbo charged.

“I think fair value has been the one piece that has probably been the most problematic, there is much debate on what it means – it is an interesting one.

“This isn’t all going to change on August 1, it will take a bit of time for people to understand.

“I think with every major change I don’t think I’ve ever see that it goes live and everyone gets it right straight way. You can’t help feeling that in all areas there is going to be some trial and error. I hope that the regulator will understand that.”

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