The need for advisers to take account of clients’ total assets, including long-term savings and investments, is at the heart of advice. This requirement is just as critical during ongoing reviews as it is at the initial advice stage.

The importance of this was recently highlighted in the FCA’s retirement income review findings. While the report was an endorsement that advisers are doing a good job overall, the regulator made it clear there are a few compliance areas, including assessing advice suitability, where it came across examples of poor practice.

One of the key elements called out was gathering all relevant information on a client’s circumstances. A core part of the process, as the FCA underlined, is that advisers must be aware of all client assets and inherently, this must include long-term cash savings.

However, over the past couple of years, as interest rates rose, many clients moved some of their long-term savings off platform, directly into notice and fixed term accounts. This has created a challenge for advisers as it’s out of their sight.

In its report, the regulator concludes with a call to action for firms to tighten up processes and meet its recommendations, including having a full view of clients’ assets.

The requirement for efficient advice processes within firms

If clients choose to hold cash savings off platform, not only is it a challenge for advisers to keep track of total assets, it also creates more work. During ongoing reviews, if clients’ cash savings are held in multiple places, advisers are unable to see a complete picture of their assets. In addition, more time has to be spent checking up-to-date values and whether the client has spent some of their savings.

With the regulator focused on delivering a more streamlined approach to retirement income advice to meet the standards it expects under the Consumer Duty, these problems only add more friction to a process that can already feel cumbersome.

The value of advice and demonstrating it

A core part of the Consumer Duty for adviser firms is setting out the service they offer - and providing value for the price charged. Moreover, being able to clearly articulate their advice services is, under the rules, key to demonstrating value.

However, this is an area of the Consumer Duty that the industry continues to find challenging, and it was recently highlighted by the FCA at an event to mark the one-year anniversary of the rules.

At the event, the regulator spoke at length about the issues adviser firms are facing to document the price and value outcome. The FCA clarified that while price is one part of value, service and understanding are critical parts too.

Choosing to hold long-term savings in cash is a fundamental shift in client behaviour. There’s a need now to rethink how this shift can be effectively integrated into advice processes and meet the Consumer Duty rules.

How Wrap can support advisers to meet these needs

Advisers can now easily manage client assets all in one place, including cash, as abrdn Wrap has fully embedded cash solutions within its Personal Portfolio, Offering advisers complete control, cash solutions also helps them to efficiently meet their regulatory duties.

The importance of cash solution’s superior level of integration within abrdn Wrap cannot be overstated. It ensures cash is just one other asset class and can be incorporated into all parts of the advice process, from it being visible on the client portal to being included in client reporting.

And by bringing client cash onto the platform, advisers are well placed to take fast action where and when they need to, moving money easily between cash deposits and investments to help ensure good outcomes.

Cash solutions can, therefore, also help advisers to demonstrate the value of their service to clients. It helps to broaden out their proposition to include the same services for cash as for other investments.

Other benefits of cash solutions on abrdn Wrap include:

With the regulator focused on industry high standards that the Consumer Duty rules require, the addition of cash solutions to abrdn Wrap can support adviser firms with that goal too for good client outcomes.

Visit Cash Solutions on Wrap or speak to one of our team.

Take a look at the other articles by Alastair Black in the series.

The value of investments can go down as well as up and your clients could get back less than they paid in.

The views expressed in this blog should not be regarded as financial advice.