Context
The FCA has published a speech, delivered by Graeme Reynolds, FCA Director of Competition, delivered at the Personal Investment Management & Financial Advice Association’s (PIFMA) Wealth Vulnerability event.
Key points to note and next actions
The headlines from the speech included:
- The FCA wants firms to take time to understand what vulnerability means for their business, and for their client base.
- Firms need to understand what procedures need to be implemented to support the delivery of good outcomes for those different aspects of vulnerability.
Reynolds made a link between the speech to the FCA’s recent commentary on looking at new and different ways of reducing the ‘advice gap’ and getting more people the financial help they need, in easy to access ways, at prices they can afford. He said that, to achieve this, the industry needs better levels of trust. Central to that is customers knowing that they won’t be taken advantage of and will be properly supported if they are, or become, vulnerable. He added that he was talking about people, and their circumstances and life experiences.
Reynolds said that it is about:
- events that can happen to us all – ill health, bereavement, job loss;
- resilience to unexpected financial or emotional shocks;
- capability and capacity to make good decisions about money management, including in times of personal stress or difficulties; and, importantly
- financial firms being able to proactively recognise those characteristics and take action to address the increased risk of financial harm they might entail.
The speech went on to discuss the FCA’s supervisory approach and work, and identifying vulnerability in practice.