On 27 July 2022, The Financial Conduct Authority (FCA) unveiled the anticipated Final Consumer Duty rules. The new rules are a major shift and will require firms to put their customers’ needs at the centre of all discussions whilst aiming to do more to protect consumers from harm and bad financial decisions.

Starting in July 2023, firms must do everything possible to avoid “consumer harm” at every step of the customer’s journey. Although most professional advisory firms will already aim for this level of consumer care when dealing with traditional investment strategies when referring to ESG/Impact investing, it can become substantially trickier. Particularly for firms with no background in understanding or articulating ESG/Impact investing client expectations and products.

It is widely recognised that a new client generation is driven by (but not exclusively) millennials, Women of Wealth, and Gen Z, that want a more personalised approach. These clients want to know that their wealth is improving society and will fire inherited advisers if they do not meet their expectations. In addition, the measurement for the scale of ESG/Impact investment can change depending on which metric it is measured against. It can also be affected more subjectively by what motivates the customer and their values.

The watchdog has said the Duty is designed to shift the mindset of firms. In our view, at Philanthropy Impact, this mindset shift is a huge step in the right direction for clients, particularly those interested in purpose-driven wealth strategies and sustainability. As we highlight in our CPD Certified, CISI endorsed training, Maximising client satisfaction.

Under the new rules, firms will be required to:

• Act in good faith towards retail customers.
• Avoid foreseeable harm to retail customers.
• Enable and support retail customers to pursue their financial objectives.

Our CPD Certified, CISI endorsed training focuses on how to approach suitability conversations with clients when looking at ESG/Impact Investing strategies. Drawing on our research and our vast resource within our network of philanthropists, impact investors, professional adviser firms, grant makers and not for profits, this workshop is designed to empower wealth managers and other advisers in the first steps to take working towards these new duties for this new generation of client.  

The session gives practical solutions to enable advisers to comply with the new duties, specifically acting in good faith towards customers and enabling and supporting customers to pursue their financial objectives in ESG/Impact investing. We are experts in how to discuss the values and motivations of clients, and understand what drives them.

We approach the advisers’ own values and demonstrate how understanding and discussing your values can create a strong and fulfilling bond with the clients. During the workshop we discuss how this can naturally lead to conversations about what approach they want to take with their wealth, using the Spectrum of Capital and contextualising within the UN Sustainable Development Goals (UN SDGs).

Come and talk to us today about how we can help advisers meet the FCA’s new Consumer Duty, comprehensively and successfully whilst also empowering you to meet the growing client need amongst millennials, Women of Wealth and Gen Z, to discuss their values and motivations.

Brighton Mazwi – brighton.mazwi@philanthropy-impact.org – 07403727806

John Pepin - john.pepin@philanthropy-impact.org - 07803051674