The FCA have always had a focus on Vulnerable Clients – in particular, how firms manage and deal with Vulnerable Clients.
Following Covid-19, this focus was heightened given the significant impact of Covid-19 on people’s health (both physical and mental) and finances (stock market drops or possible furlough/job loss).
A key element of the FCA’s focus is on the importance of protecting vulnerable clients at this time and firms should expect to receive continued and increased scrutiny on what they are doing to identify and deliver good outcomes for their vulnerable consumers.
What is a ‘Vulnerable Client’?
FCA Definition: A vulnerable person is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.
In 2018 the FCA Estimated that 50% of adults display 1 or more characteristics that show potential vulnerability. This means that 24m adults in the UK showed signs of vulnerability.
Following COVID-19, it is now estimated that 1 in every 6 adults show signs of vulnerability.
What are the 4 key drivers?
Given the broad scope of the drivers, it’s likely that most people will experience one or more of these drivers at some point in their life.
How do we support Vulnerable Clients?
We have implemented a Vulnerable Client Policy which details how we spot the signs of vulnerability and how we manage and support our client’s needs.
In addition to our policy, we regularly provide training to all staff regarding Vulnerable Clients to highlight our requirements as a firm, the drivers and impact of vulnerability and how to spot and manage vulnerability.
We have a Vulnerable Client Champion (that’s me!), to help make sure that we support clients in the best possible ways and to constantly review and challenge our own internal processes to make sure we are strong in our focus in delivering the right outcomes.
We make it our goal to make sure the fair treatment of Vulnerable Clients is properly embedded into our culture, policies and processes to make sure that we can provide clients with any additional support needs that may be required which helps us deliver the best outcomes for our clients.
Ensuring that this as embedded into our firm’s culture helps us support our clients during periods of vulnerability which is the time when they need it most.
This year has been challenging in many ways and we have recently reviewed our internal training and policies to ensure that we take the potential impact of Covid-19 in how we help provide the best advice and support for our clients.
As a firm, we don’t just look at helping our Vulnerable Clients as a regulatory issue, we do it because we support our clients at all times, no matter what life may throw at them.
We are all likely to be more vulnerable now following the pandemic and its important to remember, we are all in this together!
Andrew Lloyd
Vulnerable Client Champion
09/11/2020