• Consumer Duty most likely to change how advisers communicate with clients (34%)
  • Advisers also considering changing how they assess the value of advice (33%) and how they segment their client base and service offerings (28%)

The FCA’s Consumer Duty comes into effect at the end of July, and advisers will be considering what adjustments they need to make to their businesses to drive good outcomes for consumers.

While many will use this as an opportunity to re-examine the design and nature of the services they offer, some other advisers believe that the Consumer Duty is mainly a reinforcement of current best practice. Either way, advisers will need evidence to be able to demonstrate that they are delivering against the new rules.

Research from Aegon* shows the extent to which advisers expect the Consumer Duty to impact retirement advice. The three areas advisers expect to change most are:

  • the way they communicate with clients (34%)
  • the way they assess the value of advice (33%)
  • the way they segment their client base and service offerings (28%)

Aegon and NextWealth, Managing Lifetime Wealth, Q. How likely is it that the Consumer Duty will change your retirement advice offering in the following areas?

Aegon and NextWealth, Managing Lifetime Wealth, Q. How likely is it that the Consumer Duty will change your retirement advice offering in the following areas?


The most common way that advisers see the Consumer Duty changing their offering is how they communicate with clients, a key focal point for advisers given the Consumer Understanding outcome demands consumers receive communications they can understand.

The research also found advised clients already place a high importance on communication: 93% agree that fully understanding retirement advice is important. Encouragingly, 4 in 5 (81%) advised clients say they have at least a general understanding of how on track they are with their financial objectives, suggesting that advisers are largely delivering what clients want and expect, though with some room for improvement.

Assessing the value of advice

Firms also need to ensure their services offer good outcomes in terms of price and value. Currently, only a quarter (26%) quantify the value of advice to a great extent and 24% say they give it little or no attention. Surprisingly, only a third of advisers (33%) said it’s likely that they’ll make changes here.

The findings show that clients and advisers see value differently: clients see the performance of assets as the most important component of retirement advice**. Advisers put almost equal emphasis on four aspects - financial wellbeing (43%), tax savings (42%), portfolio performance (42%) and achievement of specific objectives (41%). While emphasis is being put on investment performance, they’re also focussing on helping their clients understand the many areas where they add value beyond a narrow focus on investment returns.


Just over half (51%) of advisers currently segment their client base, and another 9% plan to start doing so in the next 12 months. Most advisers said they already, or will, segment on the basis of complexity of need (54%) which is in line with the Consumer Duty’s emphasis on putting the client’s needs first.

Many advisers segment clients by the value of investible assets (or other measures of net worth) (53%), but this may not always consider the intricacies of what clients, even those with similar levels of wealth, may need, be it level or type of support.

Aegon and NextWealth, Managing Lifetime Wealth, Q. How likely is it that the Consumer Duty will change your retirement advice offering in the following areas?

Aegon and NextWealth, Managing Lifetime Wealth, Q. On what basis do you/will you segment your retirement advice clients?

Advisers don’t have to segment their service, but they must be confident that the service they’re offering is appropriate for what clients in the target market for that service need, and segmentation can be a beneficial way to do this. The complexity of retirement advice makes it particularly vital that advisers can demonstrate a clear link between client, their needs and the services offered.

Steven Cameron, Pensions Director at Aegon, comments:

“The FCA’s Consumer Duty will have a significant impact on the retirement advice market, not necessarily drastically changing the advice itself, but certainly the framework and evidence that surrounds it.

“Advisers should be considering all areas of potential change in their business and services that could help deliver good outcomes for their clients. Where confident they’re already delivering as the FCA would expect, it is good practice to document how they’ve come to that conclusion to avoid being viewed by the FCA as overconfident or complacent.

“The Consumer Duty seeks to put the client first and demands that consumers receive communications they can understand, services that meet their needs and which offer fair value. These considerations are mirrored in the key areas advisers expect to make change in their retirement advice offering.

“Ahead of the end of July deadline, it’s important that advisers examine where changes should be made not only to demonstrate to the regulator that expectations are being met, but to ensure that clients receive retirement advice that best suits them and the complexity of their needs.”

* Aegon research with NextWealth for the 2023 Managing Lifetime Wealth: retirement planning in the UK reportThe latest research was conducted in November and December 2022 with 221 financial advisers and 209 consumers of retirement advice. Read more here: https://www.aegon.co.uk/advisers/advice-makes-sense/retirement-advice-in-the-uk-report.html.

** Advised clients were asked to rank the importance of six components of retirement advice and performance of assets came out top, averaging at 2.5 out of 6.

Notes to Editors

Please see Aegon’s video series on the retirement advice market, where Steven Cameron, Pensions Director at Aegon, hosts a roundtable discussion with Next Wealth’s Managing Director Heather Hopkins and independent Retirement Consultant Richard Parkin. This includes a discussion of the impact of Consumer Duty: https://www.aegon.co.uk/advisers/advice-makes-sense/retirement-advice-in-the-uk-report.html

About Aegon

  • In the UK, Aegon offers pension, investment and protection solutions to over 4 million customers. Aegon employs over 2,000 people in the UK and together with around 600 people employed by Atos, we serve the needs of our customers. More information: www.aegon.co.uk. Figures correct as at 31/12/2022.
  • Aegon UK is part of the wider Aegon Group, based in the Netherlands, whose roots go back to the first half of the nineteenth century. Since then, Aegon has grown into an international business, with over 29 million customers in multiple countries and over 747.4 billion EUR of revenue generating investments (as at 31/12/2022). More information on www.aegon.com.

The information in this press release is intended solely for journalists and shouldn’t be relied upon by any other persons to make financial decisions.


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