Writing a will is a crucial aspect of financial planning that often gets overlooked. It's a task that many of us procrastinate, but it's essential to ensure loved ones are taken care of when people are no longer around. The Financial Conduct Authority (FCA) has introduced the FCA Consumer Duty, which has significant implications for those seeking to create or update their wills. In this blog post, we'll delve into the FCA Consumer Duty and discuss how it impacts the process of writing a will.
Understanding the FCA Consumer Duty
The FCA Consumer Duty is a regulatory framework implemented by the Financial Conduct Authority in the United Kingdom, designed to better protect consumers in the financial services sector. While it primarily focuses on banking and insurance, it also extends to services related to financial planning and investments, including will-writing.
The key principles of the FCA Consumer Duty are:
- Acting in the Consumer's Best Interests: Service providers must act honestly, fairly, and professionally, ensuring that their recommendations align with the consumer's best interests.
- Providing Information and Transparency: Consumers should receive clear, accurate, and accessible information to make informed decisions about financial products and services.
- Communicating in a Clear and Fair Manner: Information should be communicated in a way that consumers can understand, avoiding jargon or complex language.
- Managing Conflicts of Interest: Service providers should manage and disclose any conflicts of interest that may impact the consumer.
How the FCA Consumer Duty affects will writing
The FCA Consumer Duty has introduced a welcome level of transparency and protection for individuals seeking advice. Here's how it impacts the process of writing a will:
- Increased Transparency: Will-writing services must now provide clear and concise information about their fees, the services they offer, and any potential conflicts of interest. This helps consumers make informed decisions when choosing a provider. Here at BTWC, this is a standard practice we have embedded within our approach and we encourage our associates to do the same.
- Fiduciary Responsibility: Will-writing professionals are obligated to act in your clients best interests, prioritizing their needs and preferences. They must recommend solutions that are most suitable for your clients unique circumstances. This is all part of the bespoke service we help you to deliver to your clients. One size does not fit all and it’s really important to us the client and their needs are heard.
- Reduced Risk of Misleading Information: The Duty discourages the use of deceptive marketing tactics or overly complex language that may confuse consumers. Your client should be able to understand the terms and conditions of their will without any difficulty. As part of the consultative process we encourage, clients hands are held through every step of the process to ensure they have clarity of the contents and cost of the services you/we provide.
- Fair and Competitive Pricing: Service providers must be transparent about their pricing structures, allowing the client to compare costs and make a more informed choice when selecting a provider for their will. This is something we have always encouraged and, in all honesty, it works for all parties when there is clarity from the start as to what a client can expect to pay.
If you’re not already referring clients to a reputable will writer or taking instructions yourself to have a clearer oversight and control of the process, then consider the following tips:
- Research Providers: Take your time to research and compare will-writing service providers. Look for those who are transparent about their fees and have a reputation for acting in their clients' best interests. Look for accreditations such as STEP or the Institute of Professional Willwriters.
- Ask Questions: Don't hesitate to ask questions about the process, fees, and any potential conflicts of interest. A reputable provider will be happy to provide clear answers about how they operate and in what areas.
- Review and Update: Encourage clients to review and update their will as their circumstances change. Ensure your chosen provider can accommodate these changes in a transparent and cost-effective manner with no hidden or ongoing fees that you or your client were not aware of.
Conclusion
The FCA Consumer Duty represents a positive step towards safeguarding the interests of consumers in the financial services sector, including will-writing services. By promoting transparency, fiduciary responsibility, and clear communication, it empowers individuals to make informed decisions when planning their estates.
If you need more information just contact the BTWC team on 01522 500823.