Our website uses cookies to improve your user experience. If you continue browsing, we assume that you consent to our use of cookies. More information can be found in our Privacy Policy.
The Financial Conduct Authority is beginning to “flex its muscles” with notices issued to firms that need more data on vulnerability.
This is the view of Consumer Duty expert Andrew Gething who has warned the regulator is becoming more assertive in the area.
The regulator has started to use its Section 165 powers to issue notices to firms, requesting more data to meet the vulnerability monitoring requirements of the Consumer Duty.
Ahead of implementation in July next year, firms will be required to understand how the Consumer Duty is being implemented across the value chain.
Manufacturers have until April 2023 to inform intermediaries of how they are going to implement the Consumer Duty. Understanding and communicating vulnerability is a key part to this.
The regulatory action follows a huge variation in the proportions of consumers being identified as vulnerable.
Gething, who is managing director of MorganAsh, said this is most likely due to the way vulnerability is measured, rather than radically different cohorts of consumers.
“The key issue is there are still firms who are only reporting the proportion of vulnerable customers in single figures,” he explained.
“The reality is they are just not assessing their customers or recording their vulnerability in any sort of consistent manner.
“It therefore comes as no surprise to see the FCA flexing its muscles and issuing notices in preparation for July.”
A good approach for firms is to compare the proportions and severity of vulnerable customers against the FCA Financial Lives survey.
While each firm will be different, the data is based on 13,000 consumers and provides both a clear benchmark and a good place to start.
In Focus: Are advisers underestimating vulnerability?
Earlier this year, MorganAsh launched MARS – the MorganAsh Resilience System – a new online tool for provides brokers and advisers.
It aims to give both a consistent and objective approach to manage and monitor vulnerability.
Gething said: “A simple measure is to understand the proportions of vulnerable consumers being identified.
“Using the MorganAsh MARS tool, customers are reporting the proportion of vulnerable customers around the 50% mark, in line with the FCA’s Financial Lives Survey. Although there is variation by age and between each firm.
“We are seeing results slightly higher than the FCA Financial Lives Survey, but this is probably due to the cohorts of customers we are starting with, where there are proportionally more vulnerable. Nonetheless, the data shows the clear disparity in vulnerability assessments.
“It should all serve as a reminder to firms that a consistent approach to vulnerability assessments is necessary to produce the required data for both the regulator and for the Consumer Duty.”
The Financial Conduct Authority has raised concerns about firms’ client services as it reminded them of their duties under the soon to be implemented Consumer Duty. In a Dear CEO letter published today (2 December), the FCA said: “We are concerned firms are not adequately considering the relevance, nature and costs of these services for […]
Catch up on Money Marketing’s most popular stories this week. The FCA claimed Hartley Pensions took client money ‘without consent’ and the government pledged to make NHS pensions work better. Read more below: FCA probe claims Hartley Pensions took client money ‘without consent’ Hartley Pensions took client money without their consent and failed to […]
Have you considered how you would cope financially if a key employee in your business fell ill or died unexpectedly?
Simon Gergel, portfolio manager, The Merchants Trust, Allianz Global Investors, discusses the aim and objective of the fund, what challenges there are in running a concentrated portfolio, where to find the most value in equity markets and how the portfolio is currently positioned.
Graeme Robb, Technical Specialist at Prudential, provides pointers to help with the IHT regime applying to discretionary trusts. The UK tax system is complicated, so no wonder the Office of Tax Simplification (OTS) was established to give independent advice to the government on making things easier for taxpayers. Consider Inheritance Tax (IHT), the OTS has […]
You must be logged in to post a comment.
© 2022 Metropolis Group Holdings Limited and / or its subsidiaries and licensors. All rights reserved.
Copyright © 2019 EMAP Publishing Limited
Metropolis Financial Platforms Limited
Registered in England and Wales with number 06439194
Registered office At 10th Floor, Southern House, Wellesley Grove, Croydon, England, CR0 1XG
Forgot your password?
News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings.
Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.
Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.
Monthly magazine
Apply for your FREE Money Marketing subscription today to start benefiting from our award-winning editorial content delivered to your home or office every month.
By using this website you are consenting to the use of cookies. Money Marketing is owned by Metropolis International Group Limited, a member of the Metropolis Group; you can view our privacy and cookies policy here.
