As a “compliance person,” I’m conscious of the risk that overly detailed, prescriptive, and lengthy rules can inadvertently drive people to focus on completing steps within a process rather than considering whether that process ultimately delivers a good customer outcome. Following the implementation of Consumer Duty in 2023, and the FCA’s intentions to simplify their rulebook accordingly, I approached the Council’s Standards review with the aim of shortening them to remove noise and improve clarity. The Consumer Duty guidance provides useful examples of good and bad practices, but it’s aimed at the whole financial services sector, so it can only go so far. The new Standards aim to build on this practically and more specifically for our sector. We can’t legislate for every scenario, but by being clear on expectations against common themes, we can help drive good outcomes through comprehensive consideration of customer needs and more informed customer decision making, and help support the normalisation of utilising property wealth in delivering better standards of living in retirement, where appropriate.
On this latter point we all have a part to play, those of us in the sector need to consistently utilise the Standards and keep the customer at the heart, regardless of what recommendation that leads to – by delivering high standards we can help overcome perceptions that persist in some corners of the financial services sector. But we need regulatory shift to happen too, this includes a ‘hard’ shift in terms of the rules themselves, such as those around requiring 2 separate qualifications to provide advice on residential and lifetime mortgages, and by introducing requirements to consider all options for customers taking mortgages into later life, or to consider property wealth as part of effective future financial planning. We also need a ‘soft’ shift to happen too in terms of understanding the benefits of the later life lending sector, there are clear societal benefits to enabling people to have more comfortable later lives and with the changing demographic in the UK alongside the features these products now offer its time to recognise lifetime mortgages can be a useful, rather than last resort, option.
