Treating everyone we meet with dignity and respect is closely aligned with our core values. Some of us will need a little more help and support than others, and even otherwise resilient individuals may encounter life circumstance making them vulnerable. This document articulates our practice and procedures for the prevention of detriment to clients who find themselves in vulnerable circumstances. These procedures apply to all staff and areas of work directly with the customer.
The nature of our business makes it unlikely that new customers will be in vulnerable circumstances, or that the nature of their circumstance(s) may limit or remove the availability of facilities to the extent that the firm might be unable to accommodate their requirements. We must however remain mindful of the potential for enquiry by these clients and the potential for any change of circumstance in respect of existing customers that may lead to them becoming vulnerable. Some characteristics of vulnerability, such as bereavement and relationship breakdown, will be present in all sectors.
Definition of ‘consumers in vulnerable circumstances’
The FCA have published Finalised Guidance in February 2021 (FG 21/1) defining consumers in vulnerable circumstances and providing guidance for when dealing with vulnerable consumers. This has been the focus of a great deal of FCA attention over the past year, but particularly since the Covid19 outbreak. The FCA consider a vulnerable consumer to be someone who, due to their personal circumstances is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care. The FCA has identified the following characteristics and circumstances that it views as ‘vulnerable’ as shown in the table below:
| Health
|
Life events
|
Resilience
|
Capability
|
| Physical disability | Retirement | Inadequate (outgoings exceed income) or erratic income | Low knowledge or confidence in managing finances |
| Severe or long-term illness | Bereavement | Over- indebtedness | Poor literacy or numeracy skills |
| Hearing or visual impairment | Income Shock | Low savings | Poor English language skills |
| Mental health condition or disability | Relationship Breakdown | Low emotional resilience | Poor or non-existent digital skills |
| Addiction | Domestic abuse (including economic control) | Learning difficulties | |
| Low mental capacity or cognitive disability | Caring responsibilities | No or low access to help or support |
There are also other circumstances that affect people’s experience of financial services eg, leaving care, migration or seeking asylum, human trafficking or modern slavery, convictions about which we must be mindful. These include:
- Restricted mobility
- Communications needs
- Resource limitations
- Mental health problems e.g., depression / anxiety, bi-polar disorder
- Memory problems e.g., age (pivotal age for us is 75), dementia
Our firms understands that characteristics of vulnerability are likely to be complex and overlapping. For example, a life event like a relationship breakdown or bereavement may lead to further vulnerability such as mental ill-health or low resilience. This may be made worse if the consumer has low or limited capability to engage with financial services or to manage their finances. Equally, we must remain aware of our requirements under the Equality Act 2010. Groups of consumers with certain protected characteristics may have, or be more likely to have characteristics of vulnerability, for example older consumers.
Our approach
Our priority is to provide our clients with an excellent service. We aim to treat our entire client bank fairly and deliver high quality services which meet and exceed their expectations throughout their relationship with us.
We understand the need for “fair and appropriate treatment of clients who the firm understands, or reasonably suspects, to be particularly vulnerable.” (CONC 7.2.1)
There are several key expectations which the FCA require from regulated companies when dealing with vulnerable clients:
- Embed the fair treatment of vulnerable consumers across the workforce. All relevant staff should understand how their role affects the fair treatment of vulnerable consumers.
- Ensure that frontline staff have the necessary skills and capability to recognise and respond to a range of characteristics of vulnerability.
- Offer practical and emotional support to frontline staff dealing with vulnerable consumers.
- Understand the impact of vulnerability on the needs of consumers in their target market and customer base and understand how vulnerability can be perpetuated, or worsened by their own actions, or inaction.
- Have appropriate policies in place to identify consumers in vulnerable circumstances
- Policies to approach consumers in vulnerable circumstances in a sensitive and flexible way
- Be as transparent as possible in their dealings with consumers in vulnerable circumstances
- Firms should monitor the actions they are taking to ensure they treat vulnerable customers fairly and the outcomes vulnerable customers experience in comparison to other customers.
- Firms should proactively tell consumers about the options of help and support they offer to meet the needs of vulnerable consumers.
To ensure expectations are met we will ensure:
- All employees will be given initial training in identifying and dealing with vulnerable clients.
- All employees will be provided with ongoing training and regular updates to ensure employees continue to implement our policies.
- Our systems will facilitate the identification and monitoring of vulnerable clients.
- Our systems will enable us to deal with vulnerable clients in the most appropriate manner, so their needs are met.
- The needs of vulnerable clients will be factored into the service provision we offer.
- Our policies will be clear to our customers.
Identification of clients in vulnerable circumstances
- Mental capacity deficiencies – The FCA provides clear guidance on the identification of mental capacity issues in its Handbook under CONC 2.10.8.
- Underbanked, Financially Unsophisticated – should be identified through interview and financial profile
- Low income – can be identified through interview and financial profile
- Financial Distress, can be identified through interview and financial profile
- The nature of the need area to be addressed, for example,
- Debt management,
- Equity release,
- Sale and rent back, or
- Where the main purpose of raising funds is to consolidate debt, or
- Advising on and / or facilitating the provision long-term care
- Facilitating the distribution of assets to future generations
Assessment and management of risk
The company will not discriminate against clients in vulnerable circumstances by way of adjustment to fees, or any refusal to assist, purely on the grounds of the client’s circumstance (unless that circumstance creates a situation which is likely to lead to detriment, or a risk of detriment, in which case we will advise the client / prospect of the likely outcome and refuse to act). The following table illustrates mitigating actions for clients with mental capacity deficiencies (for the avoidance of confusion “competent person” means an individual without the limitation presented by the client.
| Capacity Issue | Risk | Mitigation |
| Language | Clients cannot fully understand important features of their agreement with us or our recommendation or the consequences of that recommendation | Client to instruct a competent person to act as interpreter. |
| Other communication problem created by disability | As above | Client to instruct a competent person to act as interpreter.
Client to nominate a reasonable communication medium suitable for their disability. |
| Mental incapacity (temporary) e.g., intoxication, mental illness | As above plus the potential for reckless disregard for consequence | Client to instruct a competent person to communicate on their behalf. Legal agreement must be reached outside of any period of incapacity.
Client should be encouraged to seek independent professional advice. If legal agreement cannot be reached outside of any incapacity, client must provide “Power of Attorney” for a competent individual to act on their behalf. |
| Mental incapacity
(Permanent) |
As above plus the possibility that any agreement might be unenforceable because of known incapacity. | Client must provide “Power of Attorney” to a competent individual to act on their behalf |
Customer service
We are aware that vulnerable consumers are more likely to have different service needs. For example, they may find some channels of communication challenging or stressful or need more time to understand information and make decisions. If firms do not ensure their customer service provision meets the needs of vulnerable consumers, they can exacerbate the risk of harm from being vulnerable.
The needs of some vulnerable consumers may be met by building flexibility into existing customer services. Frontline staff should be able to adapt their approach to deliver a service that meets the individual needs of vulnerable consumers. Firms should support staff to do this by ensuring that their culture and systems, do not discourage staff from taking extra time, or flexible steps, to respond to vulnerable consumers’ needs.
Rights and responsibilities
As a firm, and individuals working within it, we carry a range of responsibilities with respect diligent care of vulnerable individuals. These are:
- As a company we will ensure staff are aware of this policy and are adequately trained
- We will support individuals in relation to identified risk and vulnerability
- We provide means of reporting any instance where they believe that a client might be in vulnerable circumstance
- We will ensure all employees are familiar with this policy and procedures
- To take appropriate action in line with our policies
- To report any instance where they believe that a client might be in a vulnerable circumstance