The FCA is to conduct a review into what regulated firms are doing to understand and respond to the needs of customers in vulnerable circumstances.

It has promised to share its findings by the end of 2024. 

The FCA’s Financial Lives Survey published earlier this year revealed around half of all UK adults are vulnerable in some way.

Meanwhile, a study of advisers and consumers published last September found growing concerns about the financial decision making of vulnerable clients and some evidence of numbers increasing.

The study, carried out by actuarial consultants AKG and sponsored by Standard Life, found that one in 10 adults say their relatives have made poor financial decisions in the past two years resulting in some form of financial loss.

The new review of vulnerable customers was first set out in a 2021 commitment.

In 2021 the regulator said: “We will seek to understand consumers’ experiences of their treatment, for example whether they are experiencing difficulties effectively engaging with firms and accessing appropriate products. We will do this through market research and engagement with our Consumer Network.”

The regulator said on Friday: “Under the Consumer Duty, firms should act to deliver good outcomes for all customers, including those with characteristics of vulnerability.

“Our review will look at firms’ understanding of consumer needs, the skills and capability of staff, product and service design, communications and customer service, and whether these support the fair treatment of customers in vulnerable circumstances.”

It said it will also look at the outcomes consumers in vulnerable circumstances receive and whether they’re as good as the outcomes of other consumers.  

The regulator plans to conduct consumer research as well as gather information from firms and consumer representatives to make its assessment.

It also said that rather than conduct a separate piece of work focussed solely on age related issues, as it indicated in 2017, the review will look more broadly at how firms treat customers, including older customers, in vulnerable circumstances.  

It said: “That will enable us to understand whether those consumers most susceptible to harm are receiving good outcomes.”

For more information on what the FCA expects from firms, read its Guidance for firms on the fair treatment of vulnerable customers and its Consumer Duty.