FT Adviser (06/02/2019) – Advisers expect the Financial Conduct Authority to start formally supervising the treatment of vulnerable customers by the financial services industry.

An industry survey published today (February 6) by Just Group found almost two-thirds of financial intermediaries expected identifying and protecting vulnerable consumers to become an activity “formally supervised” by the FCA in the next five years.

Just found larger firms in particular thought the FCA was “increasingly entrenching vulnerability” into its regulation, with greater expectation on firms to proactively identify and support vulnerable customers.

The same firms had “high expectations” the regulator would implement a process to seek redress from firms where they have failed to meet the FCA’s vulnerability standards.

The FCA had already released an occasional paper on consumer vulnerability in 2015, outlining its guidance and definition of vulnerability, which it moved to maintain earlier this year when it said “vulnerability can come in a range of guises, and can be temporary, sporadic or permanent in nature”.

The FCA is expected to review the implementation of vulnerable client policies in the industry this year, with Just Group’s paper claiming increased scrutiny has “certainly sharpened” the industry’s focus on this area.

Alan Chan, director at IFS Wealth & Pensions, said: “Further FCA guidance on what ‘good’ looks like for any high risk advice area is always greatly appreciated by the profession and dealing with vulnerable clients would be no different.

“As the FCA puts it, ‘vulnerability can come in a range of guises’ so it’s not necessarily age related and it’s important that advisers recognise who vulnerable clients are so they can take greater care with them.

“Greater clarity by the FCA will allow those who regularly deal with vulnerable clients to review their processes and ensure all staff are treating clients fairly.

Full article link: https://www.ftadviser.com/your-industry/2019/02/06/fca-action-on-vulnerable-clients-expected/