General Insurance Article - Comments on the FCA final guidance on vulnerability

Just Group and Canada Life comment on the FCAs final guidance on vulnerability

 Stephen Lowe, group communications director at retirement specialist Just Group, said: “We welcome the finalised guidance which provides additional detail and clarity including highlighting many of the practical steps that financial services firms are already taking to fulfil their obligations. 

 “Research carried out in October last year for the FCA’s Financial Lives report revealed more than half (53%) of adults showed characteristics of vulnerability although a measure of the complexity of this issue is that three-quarters of those people do not see themselves as vulnerable. The coronavirus pandemic has shown how quickly customers’ circumstances can change and how important it is that firms have systems in place to help people grappling with those changes.

 “Firms have a great deal of flexibility how they comply with their responsibilities and it is useful to see examples of firms that are getting it right and to understand where the regulator thinks they are falling short.

 “Advisers are definitely keen to learn more so they can interact with vulnerable clients sensitively and appropriately. Proof of their appetite is shown by the fact that over 6,000 advisers have used our online vulnerability training tool, developed in conjunction with SOLLA, which we launched in 2019 and recently updated to incorporate the latest guidelines and information on the Covid-19 pandemic.”

 Andrew Tully, Technical Director as Canada Life comments: “The issue of helping vulnerable clients is not new, but it has become particularly prevalent in the wake of the pension freedoms where more people still have money invested later in life, or risk becoming a victim of scams. In addition, Covid-19 has exacerbated the challenges for many vulnerable people, while many others have found themselves newly vulnerable due to the pandemic.

 “A key strand of the FCA’s new rules is the introduction of a ‘spectrum of risk’. This avoids the stark categorising of people as vulnerable, potentially vulnerable or not vulnerable, recognising that most people could be vulnerable at some point through their life and their position will likely vary over time.

 “Those who are financially vulnerable can be a key target of scammers, and unfortunately the pandemic has provided perfect camouflage for the scammers to increase their activity as they prey on the elderly, vulnerable and financially stretched. The impact of scams is not just a financial hit, the hidden costs to mental health can be severe as victim’s ability to trust is shattered overnight.

 Despite the public message campaigns and the ban on cold-calling, the scammers are either simply ignoring the law or looking to sophisticated campaigns over social media in order to con people out of their savings. We all need to be on our guard and also look out for other family members. The rapid rise of scams just shows we all need to be vigilant, scam aware and follow the simple rule of thumb - if it appears too good to be true, it inevitably is. Simply walk away, hang up, or delete the email or text.”

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