Wealth management trade association PIMFA has published a guide to help firms support their customers with characteristics of vulnerability in the wealth management and advice sector.

Its Understanding Customer Vulnerability guide, which is also relevant to all financial sectors and related firms, is a collection of practical steps and examples across the PIMFA membership.

It also includes references and supporting tools from other external groups and organisations, which PIMFA hopes firms will use to assist in all aspects of their customer vulnerability work, from developing a strategy to day-to-day monitoring and reporting.

However, PIMFA emphasised that the guide was not intended to act as a substitute for staff development and training, which it said would be specific to the profile and circumstances of each individual firm.

The guide tackles several key points when working on customer vulnerability, including governance and culture, products and services, identification of vulnerability, and supporting customers.

It also sought to assist firms in their communications, staff skills and capabilities, and monitoring, improving, and evaluating outcomes.

The guide was launched at PIMFA’s dedicated event on customer vulnerability, which was supported by the Financial Conduct Authority (FCA).

During the event, FCA director for consumers and competition, Graeme Reynolds, welcomed the industry coming together to address the issue of customer vulnerability, recognising that addressing vulnerability within the wealth sector had improved since the FCA’s 2022 Wealth Data Survey.

However, Reynolds noted there were still some areas of concern and that more could be done, stressing that firms must maintain their focus on vulnerability as a critical aspect of securing their clients’ financial futures.

Reynolds called on firms to consider vulnerability proactively and said the FCA expected them to ensure the proper processes were in place to identify those who may need more help, ensure clients are supported in achieving their goals throughout the customer journey, and ensure communications are clear and easily understood.

He also urged firms to evolve well-trained, empathetic client service that appreciates vulnerabilities are not fixed and that circumstances change, and to use data to test whether clients are receiving good outcomes.

“Vulnerability spans all four of the Consumer Duty outcomes so getting it right is fundamental for wealth firms and advisers in ensuring their customers ultimately get a good outcome,” said FCA head of department for advisers, wealth and pensions, Nick Hulme.

PIMFA chief executive, Liz Field, added: “Our industry has made great strides, and putting customers at the centre of all we do is a leading principle for all of us; however, as ever, there is more we can be doing, and the guide we have launched today provides the practical support for firms looking to do just that.”

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