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July 3, 2024
Vulnerable clients and how to meet their needs
CREALOGIX Blog - Vulnerable clients and how to meet their needs
Digital Banking
Customer Experience

Investor vulnerability is an important issue and one that has been increasingly on the radar of regulatory bodies. Meeting the needs of vulnerable clients is a must. The challenge for firms is that vulnerability covers a wide range of complex and often sensitive situations, which makes it difficult to create a one-size-fits-all policy or procedure. Recent studies have shown that vulnerability can be exacerbated by the processes of firms if it isn’t taken into account.

Who are vulnerable clients?

Exclamation markA vulnerable client is someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a bank is not acting with appropriate levels of care. All clients are at risk of becoming vulnerable, but this risk is increased by having characteristics of vulnerability. These could be poor health, such as cognitive impairment, life events such as new caring responsibilities, low resilience to cope with financial or emotional shocks and low capability, such as poor literacy or numeracy skills.

Understanding vulnerable clients’ needs

According to the FCA’s guidance, firms asking the right questions can help to ensure that they are addressing the issue of vulnerability. They should take action to:

  • Understand the needs of their target market/customer base
  • Make sure staff have the right skills and capability to recognise and respond to the needs of vulnerable customers
  • Respond to customer needs throughout product design, flexible customer service provision and communications
  • Monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability, and make improvements where this is not happening

Barriers between banks and vulnerable clients

Premium rate phone numbers, complex bills, internet only communication and automated telephone systems can all create barriers between banks and vulnerable clients. While some may prefer to simply complete their information online to avoid another phone call at a time of bereavement, for example, others may prefer the personal touch.

  • Do you accurately record vulnerability markers securely?
  • Can you accommodate temporary or sporadic vulnerability?
  • Is the record updated across all systems to ensure the client doesn’t have to repeatedly raise the issue?

Identification of vulnerable clients

CycleAn integrated digital engagement layer can ensure that all mid and office systems are updated simultaneously. This doesn’t mean clients can only update online, the same system can be used by client managers to update the system once and ensure that the client will receive due consideration throughout the business.

  • How can you manage a situation where a client may be vulnerable but doesn’t identify themselves as such?
  • Do you consider that a client may be vulnerable, but you are not aware of it?
  • Do you clearly identify marketing materials and differentiate these from official communications and reports?

Actions firms should take to treat vulnerable customers fairly

The FCA found that 50% of UK adults display one or more characteristics of potential vulnerability, such as poor health or disability, low financial resilience or capability, or having been affected by a major life event such as bereavement or relationship breakdown. Given the prevalence of vulnerability, it should always be a factor, not only when a client requests special consideration.

Banks should consider the potential positive and negative impacts of a product or service on vulnerable consumers and design products and services to meet their needs and avoid potential harmful impacts. They should deliver appropriate customer service that responds flexibly to the needs of vulnerable consumers.

Vulnerability isn’t something that impacts a small number of the frail or elderly population, it is something that can impact us all at points in our lives. It can relate to how people receive and process information and how their decision-making may be compromised as much as more visible disabilities. It is further impacted by the performance of the market.

Understandable multi-channel communications


The broad scope of the issue highlights the importance of a clear and understandable multi-channel communications. There isn’t a digital interface that can take so many factors into account in a sensitive and supportive way and equally it’s not something wealth managers can manage alone. A digital-first approach that puts people, and personal services, at the heart of the proposition can help to ensure that wealth management firms and client managers have the efficient processes and the time to protect their most vulnerable customers. 

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