At the end of last year Broadridge Fund Communication Solutions hosted an event where experts from the Investment Association (IA) and the Personal Investment Management and Financial Advice Association (PIMFA) discussed the Distributor Feedback Template (DFT), a core element of the Consumer Duty regulation, with industry representatives from manufacturers and distributors, and including representatives from key trade associations.

As part of the Consumer Duty regulation, it is essential to gather a clear picture of consumers, so that as an industry, we can deliver better outcomes for them - because better consumer outcomes are better for everyone. Our event focused on the discussion of how the DFT is attempting to address this, and we would be delighted to share our learnings with you.

There is an acknowledgement by the industry for the need to engage with the Financial Conduct Authority (FCA) on Consumer Duty and understand their regulatory stance and the implications of this for data reporting. It is understood that there is a requirement for both manufacturers and distributors to collaborate on fulfilling the requirements, and that and challenges must be addressed in adopting a new process. To reduce the difficulties of this adoption there is a recognition of the importance of having a standardised framework for distributor feedback and that it will provide the benefits of operational efficiency and consistency.

Although information is already being shared between distributors and manufacturers there is an acceptance that the range of this data needs to be refined and made more meaningful. The last six months has seen the Joint Trade Associations Group identifying these gaps and honing down the DFT, so it provides a vehicle for providing only the most essential and useful information. Standardisation via the DFT is considered to be the solution to this, with the benefit of knowing that useful insights will be based on meaningful comparisons of “like-for-like” data sets.

While there is general agreement about the benefits of standardisation there are still questions about how the process should be operationalised. It will be a significant logistical challenge to collect data from numerous sources across various formats for compilation in a DFT format. There will be a reliance on service providers within the regulatory space, who have substantial experience in the collection and distribution of data, to resolve this challenge.

There is also a lingering anxiety that although the DFT will be able to capture this quantitative data there is still a question over how qualitative data can be collected effectively. The development of a platform shared between distributors and manufacturers could be the way forwards.

There is a sense that the DFT has not seen widespread adoption by distributors with many still “on the fence” concerning its use. Some of this may be due to unfounded anxieties about what levels of client data will be required and the extent of the data that can be gathered from Independent Financial Advisors (IFAs). However, there was some reassurance that the DFT will not require data directly from advisors and there is no need to drill down into client-level information; rather the target was focused on a much higher level and that providing aggregated data would be sufficient. It is also worth noting that at this stage the DFT is not looking to achieve 100% coverage but is aiming to collect enough information so that it is possible to make informed product reviews.

What is also generating this sense of vacillation is the thought “Will I be the only one doing this?” With the end of March 2024 deadline fast approaching we may not see a watershed moment of adoption, and there is a growing acceptance that the industry will need to embark on a journey over the next year of realising the benefits that the DFT offers.

There was an acknowledgement of the continuous nature of the regulatory process with an emphasis on collective attention and action despite the challenges. Distributor Feedback is an emerging landscape of data standardisation, regulatory compliance, industry collaboration, and the challenges involved in aligning diverse entities. The focus for the future should be on resolving these complexities through cooperation, acknowledging the evolving nature of the process, and recognising the importance of timely regulatory compliance in the industry.

For more information on about Consumer Duty and Distributor Feedback you can read our insight:

Consumer Duty: The Approach to Distributor-to-Manufacturer Feedback

To discover how Broadridge is overcoming the operational challenges of Distributor Feedback please visit our webpage:

Distributor Feedback service for Consumer Duty