A Consumer Duty fair value assessment has to show that the price a client pays bears a reasonable relationship to the benefit they get. For an adviser firm, the price that matters most is the ongoing advice fee. The FCA’s published findings on price and value say the same thing in different ways: segment your clients, use real cost data, and prove the benefit was delivered.
What the FCA has said about fair value assessments
The FCA reviewed fair value assessments across banking, consumer finance, wealth management, pensions and asset management, and published good and poor practice in September 2024. Four findings apply directly to an adviser firm.
- Segment clients by need. Good practice split the target market into distinct groups and looked at how each group used the service. Poor practice defined the market too broadly.
- Use cost data, and explain it. Good practice used activity-based cost allocation to show how profitability varied between groups. Poor practice cited costs as important without explaining how they related to value.
- Do not group unlike things together. Assessments that bundled products with materially different features hid whether each one gave fair value.
- Prove the benefit with outcomes. Good practice used evidence such as take-up of the service. Poor practice relied on descriptions of the service rather than what clients received.
In wealth, the FCA praised one firm that linked what it retained to the cost of serving different groups of investors. It criticised platforms that could not show that link.
Why firm averages fail
Most adviser firms can produce an average: total ongoing fee income against total cost of the advice team. That number says almost nothing about fair value for any one client.
A client paying a large fee on a large portfolio and a client paying a small fee on a small one sit in the same average. So does a client who had a full review this year and one who had no contact at all. The average can look fair while some clients pay for a service they do not receive, and others cost more to serve than they pay. Both are Consumer Duty problems, and the average hides both.
What a client-level assessment looks like
An assessment that would stand up to the FCA’s findings works from each client upwards:
- Price: the ongoing fee each client paid over the year.
- Cost: an allocated cost to serve each client, with the allocation rule written down.
- Benefit delivered: whether the client received the service in their agreement, including their review.
- Group: the segment the client belongs to, so value can be compared across groups, including clients with characteristics of vulnerability.
From there the firm can set thresholds, find the groups where value is weakest and decide what to do about them: change the service, change the price, or deliver what the client is already paying for.
How Pillar Lens helps
Pillar Lens reads a firm’s Intelliflo data and puts every client on one line: ongoing fee, allocated cost to serve and assets under management. It shows which clients cost more to serve than they pay and where service records are missing. Each report shows its sources and allocation method, so the firm can test the figures. Lens is decision support for the firm’s own fair value assessment. It does not certify that a firm gives fair value, and the decisions stay with the firm.
Related: what the FCA wants your Consumer Duty board report to show.
Frequently asked questions
Do adviser firms have to carry out a fair value assessment?
Yes. Under the Consumer Duty, firms must be able to show that the price of their products and services is reasonable for the benefits clients receive, and review that assessment regularly.
Can a firm use average cost to serve?
Averages can support an assessment, but the FCA's findings point to segmenting clients and showing how value varies between groups. An average on its own hides the clients who get poor value.
What evidence shows the benefit was delivered?
Records of the service each client actually received, such as completed reviews and contact, rather than a description of the service on offer.
Source: FCA, Price and value outcome: good and poor practice update, published 16 September 2024, updated 10 July 2026.