FCA Consulting on the Treatment of Vulnerable Customers

The FCA has launched a consultation on proposed guidance for firms regarding the consistent fair treatment of vulnerable customers.

Customer vulnerability has long been a focus of the regulator. In its business plan for 2019/20, vulnerability was highlighted as a long-term strategic challenge. Greater clarity and guidance regarding the identification and treatment of vulnerable customers is to be expected as a result of this consultation.

In a comment, Christopher Woolard, Executive Director of Strategy and Competition at the FCA stated, “Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture. Where we find that firms are not doing enough to ensure that consumers are treated fairly, we will take action.”

The proposed guidance will be relevant to ‘all firms involved in the supply of products or services to retail customers even if they do not have a direct client relationship with the customers’ – so it’s clearly important for all staff to be aware of vulnerability and understand what is expected of them.

That the treatment of vulnerable customers remains in the spotlight suggests that firms still need to do more to address the needs of those who are vulnerable. The FCA considers that vulnerable customers are those that are more likely to be harmed where they are not treated fairly.

Identifying and dealing with vulnerability is a complex issue that undoubtedly requires increased awareness and training for the staff involved. Customers can be vulnerable for a wide variety of reasons, including mental health issues, financial inexperience, illness, bereavement, intoxication through alcohol/drugs age, and many others.

The FCA’s draft guidance is planned around three key sections, which are:

  • Understanding the needs of vulnerable customers
  • Ensuring staff have the skills and capabilities needed
  • Translating understanding into practical action

The FCA is looking for feedback on whether its draft guidance covers the appropriate issues, is sufficiently clear on how firms can implement improvements for vulnerable customers, the potential impacts on a firms’ costs and stakeholders’ views on whether the guidance is sufficient or additional rules are required.


Please note that this consultation has now closed.

The FCA plans to issue a response early in 2020. 


About the author

Ash was Managing Director at RWA from 2018. He had over 15 years’ experience in the legal and compliance field and ten years in broker sales and leadership roles in national and global insurance firms. Sadly, Ash passed away suddenly in August 2021. 

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