UK Financial Conduct Authority Speech on Vulnerability in the Wealth Management Sector

The U.K. Financial Conduct Authority has published a speech by Graeme Reynolds, director of competition on addressing vulnerability in the wealth management sector. Mr Reynolds discusses the good and bad practices that have been observed through its supervisory work. He sets out the FCA's key expectations for firms with regards to vulnerable customers, which include: (i) to have processes in place to recognize those who may need more help or who are engaging with services which may not meet their needs; (ii) to consider why people are using products and services, what the client's goals are, and how the "client journey" that firms provide supports the realisation of those goals; (iii) to issue clear, easily understood communications and promotions to enable people to make informed decisions, tailoring them where necessary; (iv) to develop well trained, empathetic client service taking account of the fact that vulnerabilities and circumstances may change and that the firm might need to adapt in response; (v) to think pragmatically and proportionately about what a 'good' client outcome is for those using a service; (vi) to use data to test whether clients are, in fact, in the target market, and receiving the service intended; and (vii) to digest FCA publications on how the Consumer Duty and vulnerability guidance is being implemented elsewhere, considering what lessons are relevant.

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