Vulnerable Customers


With the FCA set to announce new guidance on identifying and supporting vulnerable customers, and uncertainty around Brexit having a yet unknown impact on the nation’s finances, 2019 is set to be a big year for vulnerability. So is your firm and staff ready to spot and act on the red flags in customers’ best interests?

Put yourself in a customer’s shoes. You have just been made redundant, your family relies on your income and your confidence is shot to pieces. How easy would you find it to pick up the phone and tell a complete stranger that you need help?

What would be your fear? That you might be seen as a bad customer? There could be adverse consequences for disclosing that information? How the person you are talking to is going to react? What they are going to say? Are they going to be empathetic, especially if you become emotional?

It is enough to make you not want to make the call, isn’t it?

The financial lives of consumers across the UK’ report found that half of the UK’s adult population showed characteristics of potential vulnerability.

In June, the FCA’s ‘The financial lives of consumers across the UK’ report found that half of the UK’s adult population showed characteristics of potential vulnerability. That equals more than 25 million people who are at risk of becoming vulnerable.

Yet a recent survey published by equity release lender, More 2 Life, showed more than 80 per cent of advisers said there was a need for greater education and additional resources to help spot vulnerable clients.

That is a pretty big disconnect between people who could need help and people who feel confident about recognising and acting on it.

The Money Advice Trust has welcomed the regulator’s focus and momentum behind vulnerability, but insists it is not a challenge the sector can file under ‘done’.

“In 2019 firms will need to be able to react quickly to what the new guidance says so they can train their staff effectively and adhere to what the FCA says is best practice,” explains Richard Whittington, Product Manager, Unicorn Training.

“It is about giving staff a toolkit. Staff must be able to identify if a customer is at risk of becoming vulnerable and know what to do about it. They also need to know what to say, and how to say it, if they are dealing with an individual whose circumstances have changed. The key is to know your customer and to ask the right questions.”

Spotting vulnerability
The FCA has defined vulnerability as, “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”

The More 2 Life survey suggested mental health was the biggest red flag they looked for, followed by low literacy, numeracy and financial capability. But, there may be other indicators too, for example, that someone’s account activity has altered.

Richard insists vulnerability does not always have to mean a negative change in circumstances either, with a family’s level of outgoings changing due to the happy addition of a new member also potentially increasing their vulnerability.

He continues: “The worst example of bad practice is not knowing about a vulnerability. If a staff member does not ask the right questions, or bother to find out what the circumstances are of the customer they are dealing with, then, as a firm, you are never going to know about a potential vulnerability. If you do not know about it you cannot use the tools at your disposal to help that individual out.”

Opening the door
If spotting vulnerability is one skill firms need to embed in staff, how to deal with customers revealing vulnerability is another.

The stigma of asking for help can be crippling. So, whether a customer interaction is face-to-face, over the phone or via one of the digital communications tools firms are trialing, such as Live Chat or WhatsApp, firms need to make it easy for customers to disclose information in a safe, non-judgmental environment with empathy.

“We talk about regulations and best practice,” Richard remarks, “But how do staff put that into practice in reality? It is so important for them to have the practical skills that can be applied in any vulnerability situation.”

With the Brexit uncertainty not going away any time soon, Unicorn have witnessed an uplift in interest in their ‘Enhancing the Experience for Vulnerable Customers’ courseware alongside ‘Treating Customers Fairly’ and ‘Conduct Rules’.
The course examines what the regulator’s expectations are of firms, and, most importantly, enables staff to work through practical case studies to help them consider situations that may arise and how they take a conversation forward to a fair and positive conclusion for the customer.


Richard concludes: “As hard as these things are, you want customers to have a positive experience. You want them to feel they were talking to someone who asked them relevant questions and who wanted provide the help and guidance to point them in the right direction.

“That comes down to really good training and staff not only knowing your firm’s policy, process and procedures but being able to apply them in the best manner.”

2019 is set to be the year that has arguably never been truer.


About Author

Unicorn Training. Since 1988, we’ve created L&D and compliance solutions for the UK’s ever-changing financial services industry. We love what we do. You’ll love the results. Based in sunny Bournemouth and rainy London, our 25 years’ experience and award-winning creativity have helped us grow to be a market leader in our field. Quite simply, we give you what you want. We turn complicated language into everyday language and complicated policies into everyday scenarios. We don’t just teach you “what”, we explain “how”. No matter what your eLearning needs, we’ll listen to what you need and deliver an innovative solution just right for you. And to make your life easier, we can deliver it on our very own award-winning learning & performance platform, SkillsServe. The biggest compliment we’ve had from customers is that they keep coming back for more.

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