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Vulnerable client policy

This policy sets out how all staff within our company will identify our clients who due to temporary or permanent circumstances may be classed as “Vulnerable”.

Vulnerable client policy


The aim of this policy is to outline the practice and procedures for staff to contribute to the prevention of detriment to clients who find themselves in vulnerable circumstances. The policy covers all staff within the company and, in particular, those operating in areas that deal directly with clients or those acting on behalf of a client. 

The Definition of a Vulnerable Client

The Financial Conduct Authority (FCA) has developed the following definition to guide work in this area. However, the FCA does not make specific rules to address each area of vulnerability. Instead, they establish the responsibilities within their principles for all companies. These include:

FCA Principles

  • Skill, Care and Diligence: A company must conduct its business with due skill, care and diligence.
  • Management and Control: A company must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems
  • Clients’ Interests: A company must pay due regard to the interests of its clients and treat them fairly.
  • Communications with Clients: A company must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.
  • Clients: Relationships of Trust: A company must take reasonable care to ensure the suitability of its advice and discretionary decisions for any client who is entitled to rely upon its judgement.

What constitutes someone to be vulnerable 

Vulnerability occurs in a variety of ways which may be permanent, temporary, or even sporadic, dependent on its nature.  In many circumstances the individual may not recognise themselves as ‘vulnerable’.

We recognise that vulnerability may not be simply due to the situation of the client but caused or aggravated by the actions or processes of the companies they may deal with, and is considered to be someone who:

“Due to their personal circumstances, is especially susceptible to detriment, particularly when a company is not acting with appropriate levels of care.”

What constitutes someone to be vulnerable, or potentially vulnerable, can include:

  • Health – health conditions or illnesses that affect the ability to carry out day-to-day tasks.
  • Life events – major life events such as bereavement, relationship breakdowns, purchasing first home or approaching retirement.
  • Resilience – low ability to withstand financial or emotional shocks.
  • Capability – low knowledge of financial matters or low confidence in managing money.

There is no definitive list of the different types of vulnerability. Even if there were, different people react differently to different situations, and it is therefore important to:

  • Understand the different types of vulnerability.
  • Assess the impact it can have on those people and the decisions they take.
  • Determine how your company deals with different people with different vulnerabilities.

We recognise that clients who might be considered as being in vulnerable circumstances could include those with:

      1. Mental capacity deficiencies (including language or communication), including mental illness and dementia.
      2. Stress or subject to financial shock of all types, such as employment concerns, bereavement (or potential bereavement), marital or relationship difficulties.
      3. A physical impairment that may not allow them to engage with automated, or other standard process requirements (such as photographic ID, phone keypad recognition, or internet applications).
      4. Severe and long-term illness (both life-limiting and where recovery is expected).
      5. Little or no financial experience or have no access to mainstream financial services.
      6. Low income.
      7. An existing distressed financial situation- or a major change in their financial situation on the horizon (such as purchasing home or retiring)
      8. Responsibilities for others, such as ‘carers’ or acting as power of attorney.
      9. No access to the internet or other digital media.
      10. Poor language skills.
      11. A general vulnerability due to being aged 75 and over or aged 18 years and under.

We must remain mindful of the potential for enquiry by these clients and the potential for any change of circumstance in respect of existing clients.

Understanding the different types of vulnerability

We may work with clients who at outset are in a permanent or temporary state of vulnerability. We will also advise someone who at outset would not be considered to be in a vulnerable position but changes to their personal circumstances could, in turn, change that status. Therefore, to understand vulnerability it is important we identify some of its drivers. 

Whilst it would be very difficult to create an exhaustive list, here are some of the factors that could help our practice identify potential vulnerability. Characteristics include:

  • Age
  • People in care
  • Poor health
  • Mental health issues
  • Learning difficulties
  • Physical disabilities
  • Being a carer
  • Low literacy
  • Language barriers
  • Low income
  • Living conditions
  • Single parents
  • Cultural barriers
  • Poor communication skills
  • Subject of abuse

However, it should be noted that displaying a characteristic does not automatically mean that an individual is vulnerable. Identification of the characteristic can deliver the same outcome, albeit in a suitably tailored manner, however, it is important to determine if the characteristic has led the client into a particular personal situation or vice-versa. Situations include:

  • Bereavement
  • Loss of income
  • Unemployment
  • Victim of crime or an accident
  • Relationship problems
  • Gambling problems
  • Drink/Drug problems
  • Recently left care
  • Residency uncertainty
  • Retirement

A person with a vulnerability is usually described as someone who is at a higher risk of harm than others. It is possible the client may be subject to more than one area of vulnerability. It will not always be easy to identify a vulnerability. Some of the signs may be obvious, whilst others may be hidden or not disclosed. It should not be assumed that a client will disclose a nature of vulnerability that cannot be identified through the naked eye or by having a basic knowledge of that client. It may only be identified through thorough questioning of the client to fully understand their circumstances and appreciate their needs. The risk of not understanding the vulnerability therefore increases where there is no personal interaction with the client.

Identification of clients in vulnerable circumstances

Vulnerability is broad and may occur at any time.  It will usually involve the interplay of characteristics of the individual, their circumstances, and static or transitory status.

We only deal with clients in vulnerable circumstances where we are aware of their needs:

      1. Mental capacity deficiencies – the FCA provides clear guidance on the identification of mental capacity limitation issues in their Handbook. 
      2. Stress or financial shock – may be identifiable (facial expression, posture or stance etc.), but otherwise may be revealed through conversation before and during interview.
      3. Physical impairment – may be identified visually, or through interview.
      4. Severe and long-term illness – may be identifiable through conversation or through interview.
      5. Financial inexperience – may be identified through the fact find process and their credit profile.
      6. Low income – may be identified through interview and credit profile.
      7. In financial distress – may be identified through interview and credit profile.
      8. Carers – may be identified through interview or conversation.
      9. Digital exclusion – identifiable through interview or via routes of engagement (or non-engagement) with the company.
      10. Poor language skills – may be audible or identifiable via routes of engagement with company.
      11. Clients aged 75 and over or clients aged 18 years and under – should be offered the opportunity to have a relative or friend accompany the client to a meeting.

The nature of the need area to be addressed may also indicate vulnerability.  For example, people wanting to arrange:

  • An equity release product
  • Right-to-buy
  • A first-time buyer mortgage
  • Debt consolidation or further credit 
  • Debt management 
  • The provision of long-term care 
  • Excessive monetary withdrawals from investments

These could be some indicators of vulnerability, but this is not designed as an exhaustive list. In the circumstances that apply to our company we will apply additional safeguards, as appropriate, to ensure fair treatment. This will apply to each individual but where we identify groups of the same people, we may establish a process aligned to the needs and circumstances of that group.

Assessment and management of risk

Just because somebody is vulnerable it does not automatically mean that they are unsuitable for the advice and services our company supplies. As soon we think we may be engaging with vulnerable clients we will make a record of this and ensure we adhere to this policy. 

When speaking to the vulnerable consumer we will:

  • Provide additional opportunities for the client to ask questions about the information we have provided.
  • Continuously seek confirmation that they have understood the information that has been provided. 
  • Ask if there is anybody with them who is able to assist them, and offer them the opportunity to have a family member or friend present during the conversation

We will not discriminate against clients in vulnerable circumstances. Where the vulnerability is mutually recognised, we will only adjust our fees where our services require extra resource to treat the client fairly. Any additional costs will not seek to profiteer from the situation and will be fully disclosed to the client before any subsequent work is carried out.  

Where we feel we do not have the expertise to deal with the client due to their personal situation we will make every attempt to refer them to another company or third party for the appropriate level of support to be provided. 

Understanding the benefits to our company

Supporting clients and clients who are in a vulnerable position is not just a regulatory but is also a moral responsibility. We intend to fulfil our duties in this area and as a company we see the benefits in adopting the right approach. These include:

  • Reduction in complaints
  • Greater client satisfaction
  • Engagement from a particular client set
  • Reputational benefits
  • Good publicity 
  • Improvement of overall “culture” 

We will review our practices periodically for consistency and to determine adherence to the stated policy. 

Determining how we deal with different people with different vulnerabilities

Once a vulnerability has been identified, we will consider how it is recorded and what, if any, changes they make to their sales or service processes and outcome. Some vulnerabilities are not always easy to deal with. Once a vulnerability has been identified and understood, we may deem that specialist support, which is not within its own capabilities, expertise or resources, is necessary. At that point, we will cease to act on behalf of the client and may wish to refer them on to a suitably qualified and experienced company. We may take this decision if we believe we cannot act in the client’s best interests.

The following 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 Client cannot fully understand important features of their agreement with us, their 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 encourage to seek independent professional advice.

If legal agreement cannot be reached outside of any incapacity, client must provide "Power of Attorney" to a competent individual to act on their behalf.

Mental incapcity (Permanent) As above plus the possibility that any agreement might be unenforceable as a result of known incapacity Client must provide "Power of Attorney" to a competent individual to act on their behalf.

Our Rights and responsibilities

To abide by the FCA’s principles and rules in the following areas:-   

  • Conduct of Business Rules
  • Senior Manager Conduct Rules
  • Individual Conduct Rules
  • Consumer Duty Rules
  • To ensure staff are aware of this policy and are adequately trained to identify and deal with clients who are or may appear “vulnerable”
  • To support individuals in relation to identified risk and vulnerability 
  • To provide means of reporting any instance where they believe that a client might be in vulnerable circumstances

Responsibilities of our employees: 

  • To be familiar with this policy and procedures, and be able to recognise where additional support or sign-posting to other agencies may be required 
  • To take appropriate action in line with this policy
  • To report any instance where they believe that a client might be in a vulnerable circumstance, and act accordingly in line with the policy  

Identification of and treatment of vulnerable clients – Client Evaluation 

The detail below sets out our approach to dealing with all individuals and help us to determine their circumstances and if they are in a permanent or temporary vulnerable situation. These guidelines will be distributed to all staff and each will be trained on the areas relevant to their role.

  • Assess the client against our vulnerability policy
  • Actively seek to encourage disclosure about potential vulnerability
  • Ensure the approach taken is accurately reflected in the business records
  • Consider whether to discuss the approach with colleagues/other professionals
  • Ensure the know your client information gathers sufficient details to support the advice and uses additional questioning where appropriate
  • Consider any unusual aspects – e.g. if someone else is accompanying a client, is there the potential for undue influence from that person
  • Understand who the client is and the extent of the instructions needed to act on e.g. Power of Attorney
  • Consider whether the client is acting differently/showing signs of a change of character
  • Set a list of questions to check client memory recollection, where appropriate
  • When working with more than one person, is there the potential for any conflict of interest or undue influence
  • Confirmation any change in circumstances which might lead to vulnerability e.g. taking on caring responsibilities
  • Establish whether the client’s stated needs and objectives align with their current circumstances
  • Consider whether the standard sales process or specific vulnerability group process is appropriate to the client’s needs
  • Identify products/solutions that are clear and easy to understand for those showing signs of vulnerability
  • Consider whether there is a need to adjust the delivery and format of communications e.g. providing a report in large print
  • Explain all matters with no or limited use of jargon
  • Try to accommodate flexibility around appointment locations and times e.g. visiting the client at their home at their preferred time of the day
  • Try to determine if the duration of the meeting will need extending to accommodate more detailed explanations and delivery of information 
  • Determine if the complexity of the advice will require delivery over a greater number of meetings Considered the accessibility of office visits for those with health conditions/disabilities

How we will communicate this policy to our staff

All new staff will be issued with a copy of this policy upon Induction and asked to sign the staff declaration below.

We will ensure all existing staff are fully aware of this policy and ask them to sign the staff declaration below on an annual basis.

In addition, we will

  • Discuss the effectiveness of the policy at team meetings
  • Carry out additional bespoke training for each member of staff to ensure that they understand how they may identify and deal with a vulnerable client when performing their specific role within the business
  • Seek feedback on the policy and its effectiveness from clients/ staff/ product providers/ other third parties
  • We will review and update the policy each year reflecting on experienced gained from using the policy
  • Appoint Jay Rooney to be the champion of this policy who will ensure that training is evidenced, and updates are based on changes in compliance standards as well as from experience using the policy
  • Use the MI within our business (e.g. vulnerable client report from our CRM)

How we will communicate this policy to our clients

We will inform our clients that we follow such a policy and invite them to ask for a copy. We will do this via our website and verbally at each meeting.

Get in Touch

Whether you are a private individual, business owner, existing client or a new enquiry, we are very happy to hear from you. You can call or email our office as detailed below or alternatively complete the contact enquiry form below.