How to establish a robust evidential trail and deliver fair value for assets under advice customers
This month the FCA has published multiple communications which will ultimately impact how
18/04/24
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Regulatory focus on the needs of vulnerable customers for 2024
This month the FCA has published multiple communications which will ultimately impact how financial service firms treat customers in vulnerable circumstances.
Here, TCC’s Director of Advisory Practice, Gary Maude, outlines why it’s a critical time for finance firms.
On 15th March, the regulator announced they will be conducting a review into ‘how firms are acting to understand and respond to the needs of customers in vulnerable circumstances’. This long-awaited review, which was first outlined in 2017, is expected to go further than the originally planned work on age-related issues and to look more broadly into firms’ treatment of all customers in vulnerable circumstances. It will also evaluate whether customers showing signs of vulnerability are receiving the same quality of outcomes as other customers.
Gary Maude, TCC
The FCA will be assessing a range of factors, including:
- Firms’ understanding of consumer needs at outset and on an ongoing basis until circumstances change
- The skills and capability of staff
- Product and service design
- Communications and customer service – and whether these support the fair treatment of customers in vulnerable circumstances
The news of this full-scale review follows a recent Dear CEO letter to wealth management businesses, in which the FCA urged firms to take vulnerability more seriously. The regulator also highlighted that a high proportion of firms were making the unlikely claim of having no vulnerable customers or were focusing too narrowly on age as the primary indicator of vulnerability.
Debt and vulnerability
The spotlight on supporting customers in vulnerable circumstances intensified further, after the FCA published a joint letter along with fellow regulators Ofgem, Ofwat and Ofcom. The letter, which coincided with Debt Awareness Week 18th-24th March 2024, warned financial service firms about debt collection activity and the strain this can cause to customers. Debt and vulnerability are often intertwined, and this further highlights the importance the regulator is placing on firms doing the right thing by those considered vulnerable.
It’s clearly a critical time for firms to examine their policies and processes regarding customer wellbeing and fair treatment. TCC’s experienced team of regulatory experts can help you evaluate and strengthen your approach to customer vulnerability.
Gary Maude is Director of Advisory Practice at TCC Group.
TCC’s regulatory specialists are ready to help – get in touch using the form below to discuss the next steps for your firm.