The Notebook: Why the Consumer Duty is something to celebrate
Where the City’s movers and shakers have their say. Today, Debbie Kennedy, CEO at Lifesearch, takes the notebook pen to tell us why we should cheer the Consumer Duty
Happy birthday to the Consumer Duty!
Last week saw the one-year anniversary of Consumer Duty – a relative ‘unknown’ for the average person on the street, but perhaps one of the most important pieces of regulation in financial services in the past few years.
Set out by the Financial Conduct Authority, its goal is to uphold high standards of consumer protection in financial services, requiring providers to put their customers’ needs first and foremost. A core part of this means taking reasonable steps to avoid foreseeable harm to consumers, while supporting them with their financial goals, and acting in good faith. Not rocket science, you’d think and, surely, shouldn’t we be doing that anyway?
Since its introduction, we’ve seen encouraging progress across the industry, but it’s clear there’s still work to be done. I love simplicity, but that can be a complex thing in financial services. First and foremost, this means passing the ‘Mum test’. Or, in other words, can an insurer or adviser comfortably explain the complexities of things like ‘term cover’, ‘critical illness insurance’, or justify the decisions we make, clearly enough that our mum (or dad) could buy or understand with confidence?
As someone working within the life insurance and protection industry, I can tell you first-hand this is an important problem to solve, if we are to ensure the financial resilience of the population. Income protection, for example, is still largely misunderstood by a significant number of people. The challenges we’ve faced in recent years however – a cost of living crisis, surging inflation and a population dealing with long-term sickness – could arguably make it one of the most important options for an individual to have to support their financial stability.
But this isn’t due to apathy, rather a lack of exposure to, and understanding of, how a policy such as this could benefit them – and, importantly, what they’ll get in return for their money. Earlier this year, I was unfortunate enough to break my wrist while walking my excitable dog, Kobi, up a set of concrete steps. While I walked away with a relatively minor injury (but only now do I have reasonable use of my right hand), there are thousands across the country who have been signed off work because of a serious injury and left unable to pay their outgoings. It’s situations like these, and for millions of other people across the UK, that we should be prioritising the positive outcomes of Consumer Duty.
Renters in need of protection
Last month Rightmove announced yet another increase in the average UK rent, with monthly charges in the capital reaching record highs of £2,652 per month.
Research from Canopy now finds the average UK renter spends a third (35 per cent) of their monthly income to keep a roof over their head. It’s never been more important to ensure people are adequately protected. As Labour now commits to stabilising rent and introducing a ban on no-fault evictions, hopefully we’ll now see some much needed balance and security for renters across the country. However, there’s still a need to help renters become more financially resilient and improve their credit risk.
Engaging with the younger generation
As both a business leader, and a mum to two ‘adult’ twins, I’m challenged daily, with keeping in touch with the latest trends. Right now, it’s all about ‘Brat’ – what exactly does that mean?! It’s more than ‘lime’, that I do know.
All things Brat aside, engaging in an appropriate, and relevant manner has never been more important with the younger generation. As a business, it’s opening us up to more opportunities to be creative and also challenging us to expose and broach important financial topics by being where the younger generation are – on Insta and Tiktok.
Sky’s the limit for skating star
I was delighted to hear that Team GB skateboarder Sky Brown was officially cleared by doctors to compete at Paris. As someone who recently found out I’d damaged my collarbone and my shoulder – yes, on top of breaking my wrist (!) – I could fully sympathise with Sky’s frustration. While I’ve got notably less at stake, I’ve rooted for her since her debut in Tokyo three years ago and will be ecstatic to see her competing today – go Sky!
Quote of the Week:
This week, I thought I’d look to France for some inspiration. So, in the words of Napoleon Bonaparte:
“Rien n’est impossible, seul l’impossible est inenvisageable.” Or translated “Nothing is impossible; only the impossible is unthinkable.”
What I’ve been watching
As a bucket list travel destination, I’m off to Japan later in the year. It may not be the most appropriate means of preparation, but I’m absolutely obsessed with and highly recommend the series Tokyo Vice. Based on a memoir by journalist Jake Adelstein (‘fess up time, I haven’t read it), it’s a gripping and often graphic tale of a westerner embedding himself into a completely different culture, and his unhealthy drive to expose the violent underbelly of Tokyo’s organised crime and corruption. It certainly provides a unique perspective on Japanese culture and society – I hope not to experience much of that first-hand. But the well-developed characters, superb acting (Ansel Elgort is a true star), engaging plot, and absolutely stunning visuals made the show a fascinating must-watch.