It appears that the Consumer Duty has resulted in several positive outcomes, however one thing it has failed to shift is the mountain of paperwork which still deluges most clients.

According to a report this week by campaign group Fairer Finance, the average investment product documents sent to clients remains over 21,000 words long some two years on from the FCA's Consumer Duty taking effect.

To put that into context, Shakespeare’s Macbeth runs to only 17,121 words.

Travel insurance and investment terms and conditions were loaded with the highest word counts in financial services, followed by home insurance policies (18,802 words).

Any accusations that providers are trying to hide behind mountains of paperwork full of ‘get out of jail’ clauses and excessive small print and conditions are ones that I can sympathise with.

The news comes this week as the FCA announced more efforts to cut down on its own red tape by reducing some of its reporting requirements. This is welcome but at the moment it’s fairly minor stuff.

The latest change announced this week by the FCA said, in essence, to regulated firms that if there is no change to your circumstances you don’t need to submit a return. This is a sensible move but it won’t change the future for mankind, I suspect.

It’s fair to say that while she has been widely criticised, Chancellor Rachel Reeves has used her influence to push the FCA to cut back on the red tape and with some success.

Her ‘pro-growth’ agenda would be difficult to achieve without getting rid of some of the unnecessary reporting burdens and restrictions many regulated firms face.

So wheels are in motion and I hope the FCA goes further, particularly when it comes to product documents sent to clients. Is it really necessary for clients to be sent the equivalent of a small book every time they want to set up a £50 a month savings plan?

Major financial decisions, such as buying a house or starting a pension do require careful setting up and detailed terms but the length of these needs to be proportionate.

To be fair, I suspect when it comes to excessively long product documents the FCA will say ‘it wasn’t us.’ However it does have a responsibility to consumers to make sure that the documents they are sent are pertinent, clear, well written, concise and relevant; not full of legal jargon and technical language few consumers understand.

The next stage of the Consumer Duty must be a duty on providers to make sure that clients are sent documents they can read and understand in 20 minutes or less.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin 

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