How will I know my customer is vulnerable?… 

The FCA’s recent Vulnerability Review highlighted that firms are still sticking too rigidly to processes that don’t support vulnerable customers and are falling short of Consumer Duty obligations.   

How would you rate your processes when it comes to identifying and supporting vulnerable customers? How do you, as a service provider, know that your customers are vulnerable?  More importantly, once you know, what do you do about it?  

As an industry, we need to ask ourselves why customers still experience poor outcomes driven by overly complex requirements, accessibility barriers and unacceptable levels of poor service?  

Post Covid-19, there has been a shift in considering consumers financial health alongside mental and physical health needs, a change in mindset away from ‘challenging’ customers who may be experiencing vulnerability toward ‘supporting’ them with a more flexible approach to issues such as affordability and debt recovery.  Progress has also been made recognising the characteristics vulnerable customers may have when considering stereotypical vulnerabilities such as bereavement, ill health or old age.  

Yet, to deliver an outstanding vulnerability strategy, firms need to dig deeper, assessing characteristics of vulnerability against their target market and adjusting their products, processes and approach accordingly, especially for those customers who are non-stereotypically vulnerable (NSV). 

 Operational Controls 

Firms need to develop and embed effective vulnerable customer management practices for more subtle needs, which customers themselves may not be aware of, or able to articulate as a ‘vulnerability’.   

Stress impacts people in so many ways and can be a significant barrier to decision making – the customer might not be typically vulnerable, but what if the requirements you impose create vulnerable circumstances for them?  

Identifying and analysing operational controls to mitigate the risk of impact on vulnerable customers provides the critical foundation for a world class proposition that not only meets Consumer Duty obligations but allows NSV customers to achieve positive customer outcomes as well. 

Walk a Mile in the customers shoes… 

The FCA estimates that 50% of people will be vulnerable at some point in their lifetime but acknowledges that this isn’t something people are keen to admit.  It’s still a taboo subject for many, perhaps due to a fear of judgement or the unintended consequences of disclosure? How do you provide the right support if the customer won’t talk about their vulnerability?  

Jane King, Director and Mortgage Adviser at Ash Ridge, stated in a recent interview (1) that young people with mental health conditions are being turned down for Income Protection cover. It could be argued from this, particularly in relation to mental health, that where vulnerability is more actively disclosed by consumers, this places barriers to products and services that they need just as much as consumers who are not vulnerable in the same way.  

Firms need to do more, re-evaluating their risk appetites, aligning to a greater awareness of characteristics of vulnerability within their target markets, and evolving propositions to better accommodate vulnerability.   

Understanding the customers lived experience by really listening to the voice of the customer supports delivery of good customer outcomes. Reviewing key interactions holistically across those customer journeys most affected by vulnerability will enable true integration of vulnerability considerations, not only into the levels of support available to existing customers, but also in the products and services available to target markets.  

Process and Organisational Design 

According to Lang Cat research (2), Consumer Duty has a blind spot on communications.  Outputs are still using overly technical language, leaving clients in a state of confusion and advisers needing to ‘translate’ documents which still do not contain plain, simple English.  

We must challenge ourselves to identify what support needs a vulnerable customer may have, asking ourselves how we can make the experience as frictionless as possible for them.    

Vulnerability needs to be considered when reviewing and designing processes, training and external communications.  For those firms who are actively testing their communications before making permanent changes, the FCA say they are seeing improved Consumer Understanding. 

Consideration for ‘customer ease’ needs to be given as much priority as process efficiency, regulatory requirements and cost to serve.  The benefits to the bottom-line should not be the primary deliverables when seeking to deliver the services vulnerable customers need. 

Accepting that one size doesn’t fit all, customers need options.  To ensure that the right support tools and resources are in place and easily accessible, straight through processing models should be designed and scenario tested to ensure that they accommodate a variety of customer needs, improve customer engagement and understanding and where this can’t be achieved, effective and efficient alternatives need to be put in place.  

 Our Vulnerability Framework 

When it comes to Vulnerability, a comprehensive framework that meets a variety of customer needs must support the service offering.  It should consider: 

• Identifying additional support needs – Ensuring process design and training materials identify potential triggers for additional support needs, such as allowing more time to make decisions or answer questions on phone calls. 

• Contact Optionality – Optimising channels for communication to ensure customers aren’t forced into a contact method that makes the process harder for them, for example, making webchat or out of hours support available. 

• Business Requirements – Ensuring any “must have” declarations or evidence can be supplied in ways that don’t place unnecessary barriers in the way of the customer outcome allowing, for example, verbal instructions as opposed to insisting on forms being completed. 

• Manging Customer Expectations – Proactively keeping the customer informed of expected completion times, especially where there are foreseen delays during peak transactional periods like increased death notifications in the winter. 

• MI & Reporting – Developing business intelligence that reflects the drivers of vulnerability, the impact of vulnerability and the effect these have on customers to support continual improvement of services and fulfil Consumer Duty obligations. 

Is your firm struggling to identify vulnerable customer characteristics or to embed appropriate support structures that enable customers to achieve their desired outcomes?   

Simplify Consulting can help! Get in touch to discuss how our Vulnerability Framework can support you to develop and embed effective vulnerable customer management practices. 

(1) “BMI and mental health admissions leading to protection rejections”, Tom Dunstan, FT Adviser, February 2025 

(2) “Fifth of advisers say ‘nothing has changed’ in wake of consumer duty”, Tara O’Connor, FT Adviser, February 2025 

Jo Fulford

Wealth Consultant