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Consumer Duty and Non-Advised Sales

Journalist: Amy Loddington, Protection Reporter, Financial Reporter, Property Reporter

ended 31. March 2023

With the Consumer Duty deadline looming, higher and clearer standards of consumer protection across financial services will require firms to put their customers’ needs first. 

Considering that non-advised sales do not make any personal recommendations and leave the customer to decide how they wish to proceed, could non-advised sales comply with the Consumer Duty?

5 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
I've been saying this for a long time and do struggle to understand how it is possible for a customer to 'buy' products without any form of advice when we professionals have to jump through hoops to demonstrate our competence, before even being able to make a 'sale'. Any ability for a consumer to buy financial products such as mortgages and protection without receiving advice need to be withdrawn immediately.
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Mike Staton
Director at Staton Mortgages
Non-Advised sales are a cop-out, it allows banks and brokers to make a quick quid for doing very little work and having no consequences to pay should the applicant take the wrong product. A mortgage is the largest debt you will take out in your life and should be taken seriously, no Mortgage should be allowed to be taken without advice. The FCA should bring this in immediately to protect clients from misleading comparison sites that use the consumer to make a quick buck. If you are getting a mortgage without advice because you think it's cheaper than using an advisor or because you think you know better, then you are seriously out of touch with the mortgage industry and probably shouldn't be buying a house in the first place
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
I do struggle with this one. To deal with people's protection needs (life cover, critical illness and income protection) I must pass exams and do 15 hours of CPD a year, to prove I am staying on top of the changes in the industry and products. Consumer duty then adds additional layers of regulation and customer protections on top of these requirements which mean I must be able to evidence that the customer is at the centre of all my advice recommendations and that my service offers a fair value to them. Yet, at the same time websites exist that allow an untrained person to search and apply for their own cover, with no advice or guidance at all. Hence my struggle; if protection is so important and complex (which it is), that I need to comply with all those rules, how can it also be simple enough that people can do it themselves?
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
"Is there really such thing as a non-advised sale? Most people will expect that the person selling them the product would only do so if it is something that is suitable for their needs. As a Chartered Financial Planner, I have to ensure that I fully understand my clients needs before recommending a product to them. I have to have qualifications. I have to make sure i keep my knowledge up to date. Sometimes a client might ask for a certain policy but I know that it is not right for them and something else would be more appropriate or better value. You cannot do this if you are just selling."
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Gary Bush
Financial Adviser at MortgageShop.com
Non-advised financial transactions still have to produce good outcomes for consumers, as far as Consumer Duty is concerned, and so shouldn't really be viewed any different from advised sales. Consumer Duty is more far-reaching than just an assessment of what level of advice was provided to a client, if any - it's an opportunity to reboot all kinds of processes and give them a rethink from a totally different angle. Speaking personally, as a financial advice firm that is heavily reliant on our own bespoke IT systems, it's (Consumer Duty) given us an opportunity to build in some very useful procedures and practices to improve the way we work and understand our clients transactions.