The majority of consumers think financial services companies are not doing enough to support vulnerable customers, with new research highlighting the extend of this problem.
The report, by AKG, show that just 17 per cent of consumers believe financial services support vulnerable customers — particularly as around a third of consumer admit to making poor financial decision in recent years.
It isn’t just consumer who want to see companies do more. The research highlights that advisers are increasingly focused on this issue, but would welcome more support from providers, on vulnerable customer requirements and new Consumer Duty rules.
In total around two-thirds of advisers say they are well prepared for vulnerable customer frameworks while just over half (52 per cent) are well prepared for Consumer Duty.
The report Protecting the vulnerable: Navigating the evolving regulatory landscape in a post-pandemic world explores key issues relating to vulnerable customers and financial wellbeing and is sponsored by Fidelity, RBC Brewin Dolphin and Standard Life.
The report found advisers are changing their views on vulnerability, nearly two out of five (39 per cent) say it has evolved to consider mental health, and seeing changes in client behaviour, 46 per cent say they have seen clients taking more money out following the pandemic and cost of living crisis.
Nearly half (47 per cent ) would welcome support from providers on preparing for Consumer Duty and vulnerable customer requirements, with 55 per cent valuing support on identifying and supporting vulnerable customers.
AKG communications director Matt Ward says: “Providing valuable support to vulnerable customers is a crucial challenge for financial services to tackle and given the impact of the pandemic and cost of living crisis it is evident that approaches will need to evolve as more people are potentially identified as being vulnerable from a financial standpoint.
“Ensuring more customers can achieve positive financial outcomes should be on the mind of everyone with Consumer Duty in the air, but we’ve got to consider how this is done inside and outside of the advice bubble of those who are able to/not able to access professional support.”
AKG’s paper focuses on consumer views and seeks to understand the impact of the past two years while assessing confidence levels and concerns when it comes to managing finances. It looks at adviser understanding of, and readiness for, the FCA’s vulnerable customers framework as well as awareness of how this fits the FCA’s Consumer Duty.