In line with evolving regulatory standards and the FCA’s emphasis on Consumer Duty, we have recently implemented a “vulnerability marker” feature on the P1 Platform.. It will help us to adapt services to ensure any vulnerable customers enjoy as good an experience as others and we achieve good outcomes for all users.
Background
The journey began in November 2022 when the FCA issued an industry-wide request for information regarding firms’ readiness for the then forthcoming Consumer Duty compliance. One of the key questions was: “How many customers have you identified as being vulnerable?” At that time, we reported a count of zero, but this didn’t necessarily reflect the true number; there just wasn’t a way of identifying which of our investors may have been vulnerable. For example, the FCA identified via their “Financial Lives” research that in the cohort of consumers with £50,000 or more to invest, 31% exhibit some form of vulnerability
This initial report underscored the need to improve how our systems capture and report client vulnerability information, which is essential for effective adherence with the Consumer Duty. Consequently, we collaborated with Seccl to integrate a “vulnerability marker,” allowing advisers to confirm whether or not a client presents characteristics of vulnerability.
What has changed since it was implemented?
While the feature was introduced some time ago, it was initially an optional field. Consequently, it was largely overlooked by advisers. Recognising the importance of complete and accurate data on client vulnerability, we’ve made the field mandatory. As of now, advisers are required to answer this question for every client, ensuring thorough consideration and consistent reporting. We would encourage advisers to check the records of all of their clients on the P1 Platform and to update the Vulnerability marker to show whether or not they have a vulnerability.
Why This Matters
The concept of vulnerability under the FCA’s guidance encompasses a broad spectrum, far beyond traditional definitions. Characteristics of vulnerability may include:
- Health or Age: Disabilities, chronic illnesses, advanced age, or youth.
- Financial Circumstances: Sudden changes like redundancy or the first-time experience of significant wealth.
- Life Events: Situations such as bereavement, divorce, or other challenging personal events.
- Capability: Low levels of literacy or numeracy, which may impact understanding of financial matters.
By requiring advisers to formally indicate whether a client does or does not exhibit characteristics of vulnerability, we aim to better serve all clients and meet the FCA’s standards for Consumer Duty.
Moving Forward
As our system now mandates completion of this marker, we hope to achieve a more accurate representation of client needs. This marker is not merely a formal requirement; it is a commitment to recognising and addressing the unique challenges some clients may face.
We remain committed to supporting advisers as they navigate these changes and encourage open communication to ensure that client vulnerability is identified and appropriately managed. Should you have any questions or need further guidance on the vulnerability marker, please reach out to our support team.
