Treatment of vulnerable customers Guidance Consultation Paper 19-03

The intended proposals

The purpose of the guidance consultation paper is for the FCA to inform you of their intended proposals, and for advisers to have the opportunity to give their thoughts and comments.

Main findings

The main findings were that:

  • It is hard for firms to identify which customers are vulnerable
  • Customers are unable or do not understand why or how to disclose a vulnerability
  • Firms “labelling” customers as vulnerable can be upsetting or even offensive
  • Firms are not doing enough to ensure that vulnerable customers are identified or are accommodated by their products.
  • There is an inconsistent approach by the industry so vulnerable customers are not being treated the same across the industry.

Our thoughts?

25.6 million UK adults are potentially vulnerable – that’s 50% of all UK adults! Most firms we talk to usually identify nowhere near this number. So, what is different between the way we, as an industry, identity them and the way in which the FCA is now classifying them?

Who are vulnerable customers?

As an industry, we usually identify vulnerability as physical disability or impairments, severe or long-term illness, mental health problems etc.

The regulator has now classified these into four key drivers of vulnerability:

Treatment of vulnerable customers Guidance Consultation Paper 19-03

Why such a high number?

As a population, our average age is increasing, with a lower birth rate and longer life spans. This means the potential for a customer to become vulnerable has also increased. This has an impact on the way customers engage with products e.g.


With an ageing population, we are seeing the need for a pension income for longer periods increase. Whilst people living longer is not a bad thing, as we all get older we are more susceptible to memory and understanding issues -we are more likely to need care in one form or another and we are, unfortunately, more likely to be a victim of a scam.


Despite government and local schemes, young and first-time buyers are still struggling to save for deposits. For those with mortgages already, some of us are now mortgage prisoners owing to negative equity caused by the last financial crisis.

So how do I meet the needs of a vulnerable customer?

You need to develop an understanding of the needs of your vulnerable customers and ensure that your staff are trained to meet those needs. Vulnerable customers should also be considered throughout a product journey – development, marketing, implementation, withdrawal etc.

The FCA has set this out in a useful infographic:

Treatment of vulnerable customers Guidance Consultation Paper 19-03

What you should do now…

Through this consultation paper, the FCA hopes to get clarity on the following:

  • The impact which amending our approach to vulnerable customers will have on products costs and benefits.
  • An understanding of the level of guidance which the industry wants/needs.

If you have any comments or suggestions about any of these proposals, the discussions for the consultation paper are open until the 4th October 2019. So, get them in by this date!

To do this you can:

  • Email –
  • Or you can write to – Consumer Strategy Team, Consumer and Retail Policy, Strategy & Competition Division, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN.

They will consider the feedback they are given and publish the Policy Statement towards the end of 2019.