A year on from the FCA’s vulnerability discussion paper, the Financial Services Vulnerability Taskforce has published a report outlining best practice recommendations for the financial services industry when dealing with customers in vulnerable circumstances. The aim is to ensure that all customers, including those in vulnerable circumstances, receive a responsive and flexible service and products that are appropriate to their needs.

Some of the vulnerable circumstances identified in the report’s case studies include customers suffering from severe or long-term illness, bereavement, dyslexia or learning difficulties and recommendation for firms when dealing with relatives of vulnerable people or the terminally ill.

The report highlights the importance of the first interaction with such customers and the need to pick up key signs at an early stage so appropriate action can be taken to prevent problems from escalating.

Nine high-level principles intended to improve outcomes for customers in vulnerable circumstances are identified in the report:
Sensitive, flexible response: when customers seek help and support, firms should treat them sensitively and flexibly and be responsive to their needs.

Effective access to support: customers should be able to access practical, jargon-free information and help through the range of communication channels that each firm provides. They should also be informed about other external sources of help relevant to their situation.

One-stop notice: customers should not need to tell firms about their particular circumstances or characteristics more than once.

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Specialist help available: customers should have access to specialist support to help make informed choices in light of their individual situation. Where customers require regular or ongoing assistance in such circumstances, firms should consider opportunities to provide dedicated points of contact to support them.

Easy for family and friends to support: at customers’ requests, firms should make it easy for a friend or family member to help manage their money.

Scam protection: customers particularly at risk of being scammed or financially abused need to be (and feel) protected by their financial service provider.

Customer-focused reviews: evaluation and monitoring procedures should centre on obtaining a positive outcome for the customer.

Industry alignment: the industry should, via the financial services trade associations and other bodies, identify opportunities to collaborate on areas where there’s a common agenda and an opportunity to improve the outcome for customers in vulnerable situations.

Inclusive regulation: regulators should help financial services firms and the industry to achieve better customer outcomes.

These principles are accompanied by a number of specific recommendations to improve outcomes for customers in vulnerable circumstances, including training and empowering staff. The Taskforce hopes firms will consider and translate the principles and recommendations into their own improved practices.

Comment

The report acknowledges that the financial services sector is diverse and individual firms will differ in their processes and systems due to their size, product offering, customer base and operating model, but considers that the recommendations and principles could apply to all firms. Some firms may well need to make adaptations to current business processes to enable staff to detect and properly record signs of vulnerability and to ensure they tailor their interactions with such customers to meet their individual circumstances.

A copy of the report can be accessed via the BBA website (bba.org.uk).

Greg Standing is a partner at Gowling WLG