The FCA was generally happy that, overall, progress has been made by firms to deliver better treatment to customers in vulnerable circumstances. However, more is needed – and the review highlights important areas where firms can go further.

One key message for firms is the link between the identification and disclosure of vulnerability and the level of trust customers place in financial services providers. The consumer research commissioned by the FCA found that around four in ten customers do not disclose their vulnerabilities due to discomfort, mistrust, or fear of worse outcomes.

On the other hand, of those who did disclose, around 60% felt the firm reacted positively and made appropriate adjustments. When disclosure happens, customers feel more supported – helping to build trust in firms.

Many firms have strong reactive practices in place to support customers who disclose characteristics of vulnerability. But what about proactive steps? Is your firm actively encouraging disclosure? This is an area where many firms can benefit from reflection and development.

Another key message from the review is the need for good quality data and meaningful Management Information (MI). The more detailed your data throughout the customer journey and product lifecycle, the more powerful your MI becomes.

Can your MI show where good outcomes are being achieved – or highlight where things are going wrong? If not, it may not be granular enough. The FCA identified firms that were not spotting or acting on poor outcomes due to inadequate data.

The review also highlighted insights around customer communication. While some firms have made good progress in providing clear and timely communications to vulnerable customers, many others could do more to provide accessible channels and improve customer understanding.

It’s important that members regularly review their communications – ensuring they’re as clear and accessible as possible – and that these are properly tested. Similarly, firms should review their channels to ensure they don’t create unnecessary barriers for vulnerable customers trying to seek support.

One final – and important – message from the FCA is the need for targeted, tailored training that supports teams across the business in identifying and assisting customers in vulnerable circumstances. The review found that training at the product design and development stage needs improvement.

Vulnerability should be considered whenever new or amended products and services are introduced. The FCA is clear: they expect more training for design and development teams – not just those on the front line.

Firms must also build broader internal capability by enhancing the skills and confidence of their people to identify vulnerabilities and offer tailored support. This means ensuring individuals across the organisation have the right knowledge and flexibility to meet the needs of these customers.

Too often, firms focus their training efforts solely on customer-facing roles. That shouldn’t be the case. Teams involved in areas like product, marketing or compliance also need to understand and consider the needs of vulnerable customers.

We will shortly be issuing a guidance paper with full insights into the FCA’s vulnerability work, along with practical direction on areas firms should focus on following the review. We are also developing more advanced, tailored training for member firms – covering product design, identification of vulnerabilities, signposting, tailored support and achieving good outcomes.

If this is of interest, please do get in touch with me. I am keen to ensure any training is tailored to your firm’s needs. If you have any questions in relation to the FCA’s vulnerability review, or need immediate guidance, please feel free to use our Advice Line. We will be more than happy to support.