FCA Releases findings of Vulnerability Review Quality of data and monitoring of outcomes amongst main areas of focus
13 March 2025
Dear Adviser,
As I am sure you are aware, last Friday saw the much anticipated release of the FCA's findings on the outcomes of vulnerable clients review. This was followed up by a live event on Tuesday, to which we are pleased to say we had representation at. Having digested all that was said and reported on, we are excited to share our insights with you.
Whilst the regulator praised firms overall for their work to address the needs of vulnerable customers, it also recognised that there was still some room for improvement. It also alluded to sanctions if firms fail to act, with the FCA director of consumer finance, Alison Walters, stating:
"But of course, as you would expect, when we see poor outcomes, persistent poor outcomes, we can take robust action and we will.”
So what are our key takeaways from the findings? Probably the easiest way to cover this would be to look at what the FCA considered good practice (with the areas for improvement in their findings just being the inverse).
FCA Vulnerability Good Practices
- Have good quality data - this underpins ability to demonstrate good outcomes (Governance and Outcomes Monitoring)
- Have a clearer understanding of what 'good outcomes' are (even though we still have no clarity on this from the Regulator)
- A consistent approach to vulnerability (Governance and Outcomes Monitoring)
- Take steps to identify vulnerability (Consumer Support)
- Information on clients vulnerability can be accessed by all staff (Consumer Support)
- Offer tailored and flexible support to those who in vulnerable circumstances (intro)
- Support staff (through providing means, processes, training etc) in identifying vulnerabilities (Intro)
The key theme here is data (and good data) and with the regulator stating only a small number of firms use data effectively, it is vital that you are able to gather consistent vulnerability data on each and every client. A view shared by Keith Richards of the Consumer Duty Alliance, who said yesterday:
“The CDA believes that the first step for advice firms is to recognise the wide spectrum of vulnerability and introduce a systematic process for screening all clients."
If you want to learn how Comentis supports over 750 firms and 2,500 advisers to deliver class leading data, do not hesitate to reach out to me directly.
Kind regards
Jonathan
Jonathan Barrett - CEO
