Financial services regulator the FCA has issued guidelines which set out what IFAs should do to ensure their vulnerable clients are being treated fairly. The regulator says over 24 million people display characteristics of vulnerability, including physical and mental health issues.
The FCA is consulting on the new guidance which it says provides a framework to help firms to assess their approach to vulnerable clients. The consultation will close in September 2020, with the finalised guidance expected to be issued later in the year.
The regulator says many firms are doing excellent work in the area, but it is aware of cases where vulnerability is not considered by firms. It warns that it will crack down on those which are exploiting vulnerable customers for gain.
The FCA has identified four key themes for advisers to consider:
- Recognising vulnerability and understanding customers’ needs
- The value of sympathy
- The importance of empowered and knowledgeable staff
- Meeting vulnerable consumers’ communication needs
Christopher Woolard, interim Chief Executive at the FCA, says that the initiative is a key focus for the regulator and that the coronavirus crisis has highlighted its importance. “Today’s guidance sets out what firms should do to ensure vulnerable consumers are being treated fairly.”
James Burgoyne of Brunel Professions believes that the vast majority of firms are taking the issue of vulnerability seriously. “This guidance will help firms to achieve best practice. 2020 has been a very difficult year and it is important that the pressures it has brought are recognised.”
Categorised in: Financial Services PI News
This post was written by James Burgoyne