Last year, the Financial Conduct Authority (FCA) announced that it was conducting a review of how firms treat customers in vulnerable circumstances. It also took the opportunity to consider whether its existing vulnerability guidance (FG21/1: Guidance for firms on the fair treatment of vulnerable customers) remains appropriate in light of Consumer Duty.
The results of this review were published on the 7th March 2025, with the FCA finding many examples of positive actions being taken by firms. However, the FCA has also identified some areas where improvements are required, as it appears that vulnerable customers continue to experience poor outcomes when compared with other customers.
In terms of the existing vulnerable customer guidance, the FCA has decided not to revise it, or introduce new requirements for firms. Instead, it has published examples of good practice and areas for improvement.
Some of the areas firms should focus on when thinking about vulnerable customers are as follows:
Governance and outcomes monitoring:
Defining the outcomes you want your vulnerable customers to receive is crucial. If you don’t know what those outcomes are, you won’t be able to work out if you are meeting them or not.
Use good quality data to understand whether your vulnerable customers are receiving good outcomes, such as:
- Look at your vulnerable customer records to see what types of vulnerabilities they have and consider whether there are changes you could make to meet their needs better.
- Analyse complaints received from vulnerable customers. What are they complaining about? What adaptations can you make to the way you support them to make sure that they receive good outcomes and don’t have to complain again?
- Don’t forget about your distributors. Often, they are dealing directly with vulnerable customers and have valuable first-hand knowledge of customers situations and needs.
- Do your staff know what they should do and who they should refer to if they find that customers are not receiving good outcomes? Have clear processes in place so that they can escalate issues identified.
- Senior management should be fully engaged in delivering good outcomes for vulnerable customers and the topic should be regularly discussed at a senior level in the firm. This will improve the focus on vulnerability in your firm’s culture.
Customer support:
- Where possible, offer flexible support options to vulnerable customers which could include giving staff the ability to adapt standardised processes where appropriate.
- Put systems and processes in place to record customers vulnerabilities which can be easily retrieved when they next contact you.
- Ensure staff understand how to record vulnerable customer information and the importance of reviewing these records regularly. This helps ensure that support provided is appropriate and prevents customers having to repeat themselves each time they make contact, which can be distressing.
- Support staff in dealing with vulnerable customers by making sure that they have appropriate skills, experience and support to identify and deal with these customers. Inform customers about the support options available and regularly assess whether these options continue to meet their needs.
Customer understanding:
- Minimise jargon and complex terminology, use plain English, short sentences, short paragraphs, bullet points and clear headings.
- Give vulnerable customers extra time to read through your communications.
- Proactively ask customers if they need help going through documents, or whether there are particular sections that they find difficult to understand.
- Ask customers whether your communications are clear and are in the format they need.
- Avoid a one-size-fits-all approach by offering different ways to communicate with vulnerable customers, using communication channels which meet their needs.
- Review your communications regularly, taking vulnerable customer feedback and complaints into account.
Products and services:
- Consider the needs of vulnerable customers at every stage of product and service design, from idea generation and development to testing, launch, and review. Analysing what vulnerabilities customers may have and what their needs are is crucial, so that they can be built into product and service design at an early stage.
- Staff involved in the design of products and services should have the appropriate skills and capability to understand customer vulnerabilities. To ensure this, they should be included in vulnerable customer training sessions.
- Include vulnerability questions into your product review framework.
- Engage with charities and support groups to help you understand how your communications can be designed to better help vulnerable customers.
Any changes made should be evaluated afterwards to check that they have improved the vulnerable customer's experience.
We can help
Please do get in touch if you need support with your vulnerable customer arrangements. We can support you in a number of ways such as providing guidance and advice, policies and procedures, online and face-to-face training.
