According to research from Quilter, around five per cent think their profitability will increase and around 46 per cent expect profitability to stay the same.
The report continued that nearly a quarter of financial advisers expect their turnover to decrease, almost two thirds say it will stay the same.
Around eight per cent expect turnover to increase, possibly showing that advisers do not see a business opportunity from Consumer Duty, Quilter noted.
The average cost of complying with Consumer Duty was pegged at £18,161, with the median coming to £7,500.
For advisers in a network the figure came to £15,076 and those directly authorised expected costs to come to £19,934.
Size matters for Consumer Duty
The size of the firm also impacts costs with sole traders expecting to see a cost of £4,925, compared to £93,325 for firms with 21 advisers or more.
For mid-sized firms between six to 10 advisers to cost is predicted to reach £20,208 and 11 to 20 adviser strong firms could reach £26,666.
Nearly a third of financial advisers said they expected customer fees to increase due to Consumer Duty.
‘Consumer Duty needn’t be a drag on your business’
John Kerr, advice recruitment director at Quilter Financial Planning, said: “The Consumer Duty is a landmark piece of regulation and has the potential to alter the customer experience for the better from day one.
“With the rules coming into force today, it is important that financial advisers have their systems and processes in place and that these have been communicated across the firm.”
He added: “Clearly, there has been a cost implication for financial advisers and they have fears about what this will do to turnover and profitability. However, advisers should seek support externally too.
“Providers and suppliers have lots of resources out there for advisers to help them through this period of change, while looking to outsource elements of the value chain can ease the heavy lifting.
“The Consumer Duty needn’t be a drag on your business. Cleaning up and tailoring the customer experience more can be a great way to not only increase customer satisfaction, but also prompt positive reviews and referrals. While there may be some upfront cost now, this will hopefully come to fruition over the long term.”
