The industry needs to stop looking inward when designing big ticket interventions and ask consumers what they need instead, says Richard Howells, chief operating officer at Sesame Bankhall Group.
He says the Retail Distribution Review and the consumer duty were both designed from the regulator's or market's point of view, when instead it should have started with the consumer, and the problems they say need solving.
The RDR has been successful in many ways, including raising the professionalism of advisers, but it has also created lingering issues, such as the growing advice gap.
He adds the consumer duty will go some way towards solving these unintended consequences, but it too had had the wrong starting point.
"Let's create a regulatory or a market intervention that solves the problem the customers tell us they've got, not necessarily the ones that we think that we've got," Howells says.
He notes one of the issues was that the money industry does not offer consumers all the resources they need in one place in the way other service providers would, such as a gym.
"Let's go to the consumer and say, 'what's the real problem we need to solve here?' and I think let's consolidate all of the help a customer needs in terms of their overall money short term and long term into one place and make it simple for them.
"Because for me the biggest challenge that the customer has got is they just simply still don't understand."
He says one of the good things coming out of the RDR was a better working relationship between fund managers and advisers, leading to the rise of vertically integrated models – something that could accelerate under the consumer duty as a focus on value will be expected to cover the whole investment chain.
"I don't think it means everybody is going to have to be in a vertically integrated model but I think there's going to have to be much more clarity and transparency about where each of them are," he adds.
"It's always been part of the problem; does the customer really understand? I'm not sure that the rank and file consumer, who is perhaps investing for the first time, does."
Howells, who used to be managing director of the Sesame network, says another consequence of the RDR was how it changed the skill set of adviser principals.
Whereas before they were advisers who ran businesses, now they are highly skilled business owners.
He said: "The RDR really signalled a change in the way that principal of financial planning businesses are, they are much more like business people now.
"Whereas before they were financial advisers who happened to own a business, I think now we have professional financial planners who are also, if they're the principal, very good business people.
