Regulator readies for new work on vulnerable clients

Regulator readies for new work on vulnerable clients

The Financial Conduct Authority is set to launch another consultation on vulnerable clients in the coming weeks, as it pledged to stand "shoulder to shoulder" with the industry on the issue. 

Last year the regulator put its long-awaited guidance on vulnerable consumers to the industry, closing its consultation in October. 

The regulator said at the time the guidance would be used as a tool for its supervisors when assessing how firms treat vulnerable customers, and companies would be expected to "consider the relevance of the guidance for their firm" and take action by "improving existing, or implementing new, practices and processes".

Speaking at a conference hosted by The Investing and Saving Alliance in London today (February 6) Nisha Arora, director of consumer and retail policy at the FCA, said a second consultation on the regulator's guidance could be expected in the "next few weeks". 

Ms Arora said: "This is not about the regulator against the sector, this is about standing shoulder to shoulder and working together to improve the treatment of vulnerable consumers. 

"We’ve seen some really good progress [in the industry], with great initiatives and a lot of research - a lot of progress being made, both by us and the sector. 

"But five years on I think it’s clear that further work still needs to be done. We’ve got to ensure that the good progress we’ve started with is maintained and evolves."

The policy director said she wanted to see the "pockets of good practice" in the market spread across the whole sector, giving vulnerable customers a "consistent experience across the financial services industry". 

Last year the regulator promised to take action against firms which did not treat vulnerable customers fairly, warning it had found cases where firms had clearly failed to consider the needs of these consumers.

Today Ms Arora said: "The role of staff is absolutely critical in the treatment of vulnerable customers. 

"Vulnerability has to be something which is embedded right across the organisation, from top to bottom.

"What we sometimes see is a disconnect between policies at the top and practice in the firm. Those things have to connect - we do not want a policy-practice gap."

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