At the end of July, the Financial Conduct Authority published its most recent draft guidance on vulnerable customers, picking up on feedback it had received on its consultation last year.
Treating vulnerable customers well remains a key priority for the FCA.
It wants companies to do more to make sure vulnerability is taken seriously and that vulnerable customers are receiving positive outcomes.
The next step is to finalise the guidance – late this year or early next year.
However, companies should already be well advanced with developing their approach to vulnerable customers.
In interviews with senior managers, the FCA will want to know how companies have embedded fair treatment of vulnerable customers into their business.
Developing a robust vulnerable customer policy is vital. Here are five top tips on how to do that.
- Look at what you do currently. When building a policy, do not reinvent the wheel.
You could start by looking at what you already do. You will already have vulnerable customers and may have naturally developed different and more appropriate ways of treating them.
Staff’s experience of your customer base will be valuable, as well as the techniques they have already developed to identify and deal with vulnerability.
- Embed the policy into the culture of the company.
The FCA is clear this is more than just developing a policy.
The principles of how the business identifies and treats its vulnerable customers should be ingrained into the culture of the company.
This goes beyond a mere tick-box exercise; instead the FCA is keen the principles should change the way that all staff in the company both think and react in all aspects of their job.
Watching out for vulnerable customers and following strategies to treat them well should just be something your company does.
- Include frontline staff. Frontline staff can play an important part in the execution of an advice company’s policy.
They can spot signs of potential characteristics of vulnerability – for example stress, grief or depression – and should know how to respond. One key change the FCA has proposed is moving away from a stark definition of people being vulnerable or not, to a “spectrum of risk” where everyone fits in somewhere.
FCA research shows staff who were able to sympathise with vulnerable customers and get them to confide in them made a big difference to their experience with the business.
The policy could advocate the creation of ‘vulnerability champions’. These are specialist staff to whom others can ask questions or refer particularly vulnerable clients if need be.
- Develop flexible processes. Many problems vulnerable customers experience relate to poor interactions or systems that are unable to flex to meet people’s needs, making people’s situations more difficult.
Think about how people could be served in a slightly different way, such as changing ways of communicating or how forms must be completed. And empower your staff to offer this flexibility when they think it is appropriate.
- Review your policy. Instead of developing a policy, carrying out initial training and then letting it slide in importance, the FCA wants companies to regularly review the policy.
Companies could devise a framework to regularly assess and test how well the policy is working, and then put into place a programme of improvements.
Sharing good practice among your peers can really help. Understanding how others have tackled this issue will help you build a more robust policy.
Achieving positive outcomes for vulnerable customers is a key priority for the FCA in this new decade.
Your approach and the policy you develop should not just sit on a shelf collecting dust.
Instead, it has to be embedded into your culture, policies and processes throughout the whole customer journey.
Rachel Vahey is senior technical consultant at AJ Bell
