'Ensure your disabled clients are not worse off'

A recent report by the Personal Finance Research Centre at the University of Bristol reaffirmed that disabled people are currently having a disproportionally worse time on the financial front.

Unfortunately, this is not new – we have seen similar reports from other organisations such Money and Mental Health over the years.

However, this report highlighted that some consumers were even worse off than had previously been the case, including those with: physical mobility impairments, learning difficulties, mental health conditions, multiple health conditions, conditions that affect one’s appearance, non-visible conditions and memory-related conditions. 

Many, indeed most, of these conditions are typically not obvious to others. They require some interaction to ascertain.

Within the finance sector, many of these conditions would not be identified or recorded during day-to-day interactions; they may be debilitating, but that does not mean they are apparent, especially if you are not looking out for them.

Many firms have said something like: 'that’s very sad, but it doesn’t apply to us'. It's doubtful that this was ever the case, but under the consumer duty, the responsibility is clear.

The government has been receiving reports like this for years, and it is looking for the Financial Conduct Authority to stop disabled people getting worse outcomes than those who are not disabled.

For years the financial services sector has been saying this does not apply to them, but in practice has no data to support this assertion.

The FCA therefore now requires that all financial firms provide evidence to show that the outcomes which their disabled consumers receive is, at the least, no worse than those received by the non-disabled.

Many financial firms have said something like: 'that’s very sad, but it doesn’t apply to us'. It's doubtful that this was ever the case, but under the consumer duty, the responsibility is clear: every financial firm now has to report on these issues and demonstrate, clearly and empirically, if it applies to them or not. 

Many firms have not picked up that this is a requirement of consumer duty, and, to be fair, it is slightly hidden in the rules.

Clause 1.28 of the FG22/5 guidance states: “The duty also supports existing legal requirements, such as those in the Equalities Act 2010, by requiring firms to monitor whether any group of retail customers is experiencing different outcomes than other customers and take appropriate action where they do.”

It is also worth understanding how disability is defined under the Equality Act 2010 – it is not just ‘people in wheelchairs’. The definition is, quite rightly, far wider.

In the Equality Act, a disability means “a physical or a mental condition which has a substantial and long-term impact on the ability to do normal day-to-day activities.”

Those covered under this definition include people with a progressive condition like HIV, cancer or multiple sclerosis – even if they are currently able to carry out normal day-to-day activities. As they are diagnosed with a progressive condition, they are protected. 

Consumers are also covered by the Equality Act if they had a disability in the past. For example, if the consumer previously had a mental health condition that lasted for more than 12 months, but from which they have since recovered, they are still classed as disabled under the act.

In practical terms, this means that all financial firms must report annually, at the least, on how consumer outcomes are different for those with vulnerabilities and protected characteristics compared to the resilient.

Since we have identified that many of these vulnerabilities aren’t obvious without interaction, this is not easy.

Understanding that the vulnerable are worse off raises the obvious subsequent question: which cohorts of the vulnerable or those with protected characteristics are worse off? Is it the bereaved, the blind, those with mental health issues and so on? Clearly, the resolution to each of these is totally different.

Technology shifts what could be a complicated and difficult task for firms to simply a standard part of their assessment process.

Therefore, in practice, firms' reports need to identify to a reasonable degree of detail on the types of vulnerability or protected characteristic that are of concern. It will also be important to know the proportion of each cohort that is receiving bad outcomes.

Platforms are available to help firms assess, manage and report on vulnerable consumers. With some, firms have the option to collect protected characteristics data directly from the consumer, as an integral part of the vulnerability assessment. 

In essence, technology shifts what could be a complicated and difficult task for firms to simply a standard part of their assessment process.

With this data, firms should then be able to demonstrate that those consumers with disabilities fared just as well as the non-disabled consumers they dealt with. Only this can provide the evidence to confidently say 'this does not apply to us'.

Andrew Gething is managing director of MorganAsh