Being prepared for the impending FCA publication of vulnerable customer guidance

One of the key areas of focus in the FCA 2020/21 Business Plan is ‘ensuring that the most vulnerable are protected’.

As we await the forthcoming publication of the FCA's finalised guidance (scheduled in Q1 2021), the GC19/3 consultation provides us with a timely reminder of the materiality of this crucial issue for businesses - both in terms of scale (with half of UK adults - 25.6 million people - displaying one or more characteristics of being potentially vulnerable) and the complexity of identifying, reviewing and resolving issues affecting vulnerable customers.

The GC19/3 consultation set out the following categories that act as drivers to actual or potential vulnerability:

• health – health conditions or illnesses that affect the ability to carry out day to day tasks
• life events – major life events such as bereavement or relationship breakdown
• resilience – low ability to withstand financial or emotional shocks
• capability – low knowledge of financial matters or low confidence in managing money

Given the impending publication of the final guidance (Q1 2021), the GC19/3 provides a challenging reminder to the required "practical shift in firm behaviour that enables this to happen".

GC19/3: Guidance for firms on the fair treatment of vulnerable customers (fca.org.uk)