Creating avenues for good outcomes for advisers and vulnerable customers

Consumer Duty places real emphasis on firms to assess their entire customer base to identify their vulnerable clients and ensure the outcomes they receive are at least no worse than the non-vulnerable. There’s no denying that this is an onerous task and in this first year of the new regulation, many firms across financial services have turned to technology to not just save time and resources, but to deliver the necessary results.

Just as important is what happens next once a vulnerability is identified. This is particularly intensive when you consider the broad range of vulnerabilities that a client may be dealing with at any one time. Under Consumer Duty, this spans further than financial pressures to include health issues and disabilities, family issues such as bereavement, divorce and domestic abuse, protected characteristics and so many more. Thankfully, technology is proving to alleviate this challenge too.

By completing an individual vulnerability assessment, platforms such as the MorganAsh Resilience System (MARS) can automatically generate recommendations on suitable next steps – MARS refers to these as ‘treatments’. A tech-first approach eliminates the significant and ongoing training required to stay up to speed with all possible mitigating strategies for all manners of customer vulnerability. Advisers are able to do what they do best and rely on tech to provide a suitable treatment in real time when the need is discovered.

Debt advice

Given the challenges of the current climate with higher interest rates and household costs, it’s hardly surprising to hear that debt is a major concern for many consumers. According to The Money Charity, average total debt per UK household in April 2024, including mortgages, was £65,143.

For those unable to service serious debt, there’s no question they will be in a vulnerable position. That’s without even considering other challenges or factors they may also be facing. While advisers may be able to identify debt concerns as part of their fact find, they may not necessarily know the correct next step or treatment to support a positive outcome.

Using MARS as an example, we recently partnered with PayPlan, one of the UK’s largest debt advice organisations to include their debt advice service within MARS as a support service. This means MARS users can refer any clients with debt issues to PayPlan for free debt advice. According to data from PayPlan’s dedicated vulnerable client team, 53% of all PayPlan clients disclose a vulnerability, making tailored support and advice absolutely essential.

Avenues to good outcomes

Access to free debt advice is just one element of support that is available to those in financial difficulty, with treatments that can identify potential coercion or support those involved with loan sharks. MARS also has an integrated benefits calculator from Inbest, enabling advisers to check if clients are missing out on any important benefits, social tariffs or local discretionary grants. Research suggests that UK households are missing out on as much as £19 billion of support each year.

When we say there is a wealth of mitigating strategies, support organisations and charities supporting a wide range of potential vulnerabilities, we truly mean it. There is also the potential to utilise data from the assessment to successfully triage a client’s suitability for protection or an enhanced annuity.

By adopting and integrating the right technology, advisers have these suitable next steps at their fingertips at the time of need. Firms can even add their own, perhaps if they’ve found particular success with a local or niche support provider. This is particularly useful for the many treatments that you may call upon once or twice per year, but are still incredibly valuable.

To be completely on top of customer vulnerability is a mammoth task – especially when you consider the extensive requirements already facing advisers just to do the day job. Adopting a digital approach to customer vulnerability not only streamlines this process and achieves better data and results, it enables advisers and firms across financial services to deliver a far better, and more tailored service.

While Consumer Duty is clearly a vehicle to improve standards across financial services, those looking at the bigger picture also see the competitive advantage it can offer too.