On 7 March 2025, the Financial Conduct Authority (FCA) published its findings following a multi-firm review of firms’ treatment of customers in vulnerable circumstances. The FCA has also published a review of good and poor practice examples to further help firms provide the right care consistent with the Consumer Duty.

Key findings

The FCA evaluated firms’ actions in line with Finalised Guidance 21/1: ‘Guidance for firms on the fair treatment of vulnerable customers’ (FG21/1) so to test how firms are supporting customers in vulnerable circumstances and consider whether its existing vulnerability guidance remains appropriate in light of the Consumer Duty.

Whilst the FCA found that consumers were able to report good examples of firms responding flexibly to meet their needs and offer tailored support, consumers continue to report challenges, particularly if they have multiple characteristics of vulnerability.

Key findings from the multi-firm review include:

  • 44% of customers in vulnerable circumstances reported a negative experience with a financial services firms compared to 33% of customers not in vulnerable circumstances.
  • 42% say they have disclosed personal circumstances to firms:
  • 19% said they were encouraged to do so by the firm.
  • 22% felt it was necessary given their circumstances.

Good and poor practices

The FCA encourages firms to make use of the examples of good practice and areas for improvement. 

The FCA has these out under the following headings: 

  • Governance and outcomes monitoring.
  • Consumer support.
  • Consumer understanding.
  • Products and services.

In terms of governance, an area of good practice that the FCA found was that 79% of respondent firms said their senior leadership had active involvement such as reviewing governance arrangements, processes and systems. And 70% said their senior leadership was responsible for delivering good outcomes for customers in vulnerable circumstances. However, an area of poor practice that the FCA picked up on was a lack of engagement, challenge and direction from some senior leaders. The FCA found that most firms had established organisation-wide vulnerability policies but only 39% of firms had formal governance bodies or committees that oversee and influence outcomes for customers in vulnerable circumstances.

During the multi-firm review the FCA saw that firms best supporting consumer understanding tended to make sure communications are clear and written in plain English. They also communicated in a timely way, tailored communications to target markets / customer bases and offered channels that met the particular needs of customers in vulnerable circumstances. Furthermore they tested consumers’ understanding of communications and made changes where required. As for areas of improvement, the FCA’s consumer research (see below) found that customers in vulnerable circumstances were less likely than others to say their financial service provider’s communication channels met their needs. This applied across all main drivers of vulnerability and was particularly pronounced for those who had low confidence in managing their money.

As for consumer support, an identified good practice was that following multi-firm work on power of attorney (PoA) and bereavement customer journeys in retail banks and building societies, the regulator found that most firms were taking steps to identify signs of vulnerability and encourage customers to disclose their needs. Examples of good practice included using centralised systems to store information about a customer’s circumstances or needs, which could be accessed by colleagues across almost all of a firm’s retail business areas. This meant customers did not have to repeat potentially sensitive information. An area for improvement was that the FCA found that taking steps to identify signs of vulnerability and encourage customers to disclose their needs was challenging for most firms. In particular, the regulator saw this in firms that have primarily digital customer journeys. In its multi-firm work on PoA and bereavement customer journeys, the FCA saw some firms adhere rigidly to standardised processes for PoAs and fail to respond flexibly to customers’ or customer representatives’ needs. For example, in some instances, staff did not tailor their approach for acutely distressed representatives.

With regard to products and services the multi-firm review showed that firms are yet to make significant progress in product and services design. Firms should consider this as a focus area as they continue to embed the Consumer Duty. Good practice included product design teams engaging with third parties (for example charities for specific disabilities) with relevant knowledge when reviewing and designing products. Areas for improvement included that product and service design staff may rarely receive vulnerability training. Just over half (54%) of firms who told the FCA they had training in place for non-frontline staff answered that training or internal guidance for those staff included how vulnerability is relevant to their specific role and how to implement this in practice. 

FG21/1

The FCA will not be updating FG21/1, as it has concluded that it remains appropriate and helpful alongside the Consumer Duty, based on feedback from the multi-firm review.

Consumer research

The FCA has also published consumer research (dated May 2024, published 7 March 2025).