Data struggles around closed-book clients should not be a dominant theme in the next phase of consumer duty implementation, says Jamie Jenkins.
The director of policy and communications at Royal London plays down concerns raised by the Financial Conduct Authority about potential gaps in client data held by firms, which he says should be able to provide any data necessary.
The FCA in April said it had concerns the data firms hold about their customers could be incomplete.
It told chief executives they should be taking steps to make sure basic details are held and proactively work to fill any gaps found.
Vaughan Jenkins, managing director of partnerships at Moneyhub, says his firm has already seen businesses "struggling with data sufficiency and quality to comply with the duty".
"Most of the initial work that firms have completed is also reactive and backward-looking rather than proactive and helping customers to avoid foreseeable harm," he tells FT Adviser, adding closed books, by their nature, present even greater difficulties for firms.
But Royal London's Jenkins says he would be "worried if that came out as a theme", because firms have always had a responsibility to look after and be able to service their existing clients.
The deadline for complying with the next phase of the consumer duty is the end of July, when providers will need to assess the inherent value of their closed book contracts over newer ones with more functionality.
"The first phase of it was the big one really," says Royal London's Jenkins. "The second phase of it, a lot of that will be about data and older products – legacy issues."
While the first phase of the duty was about looking at the customer journey and whether products were working as intended, the next phase will see providers assess whether there are better and more modern contracts they can switch their closed-book customers to.
It will be a case of weighing up the benefits of the older products – which can be significant and no longer available, such as certain guarantees – versus their limitations.
It will be a big task, says Jamie Jenkins, but he says he does not expect it to result in a lot of switching, at least not immediately.
"I wouldn't sit here and say it's easy for the industry to do that. It's a big task because it's many, many layers over many years of different products.
"But I mean, every large provider will have that challenge. And we'll be going through that.
"I don't think there'll be a lot of movement right now. There's a lot of complexity to that and there's a lot of decision-making that will need to underpin it. But I do think over time we'll start to see a lot of those [products being switched]."
