Vulnerable Client
Embedding vulnerability into financial advice: A regulatory and human imperative
3 min read 16 Oct 25
The information contained in this page is for UK Financial Advice Professionals only. If you are a private investor, please visit the Private Investor section or contact your Financial Adviser for more information.
In today’s financial landscape, the fair treatment of clients in vulnerable circumstances is no longer a regulatory footnote. It’s a central pillar of ethical and effective advice.
The Financial Conduct Authority (FCA) has reinforced this in its 2025 review of the original 2021 Consumer Duty guidance (FG21/1), urging firms to move beyond policy and into practice. For financial advisers, this means embedding vulnerability awareness into the very DNA of their operations.
Understanding vulnerability: A universal experience
The FCA defines vulnerability as a condition that can affect any client at any time, driven by four key factors: health conditions, life events, low resilience, and low capability. Crucially, the regulator now favours the term “customers in vulnerable circumstances,” a person-centred phrase that avoids labelling individuals as inherently vulnerable.
This shift reflects a broader cultural change. Vulnerability is not always a static trait. It can be a fluid state arising from bereavement, illness, financial hardship, or even temporary stress. Advisers must be equipped to recognise these circumstances and respond with empathy and precision.
From compliance to culture
The FCA’s 2025 review doesn’t introduce new rules but sharpens the focus on outcomes. Firms are expected to move from compliance checklists to cultural maturity, where fair treatment is instinctive, not procedural. This means:
- Encouraging client disclosure
- Tailoring support to individual needs
- Monitoring the effectiveness of interventions
It’s the depth of relationship advisers have with their clients that is essential in building trust and uncovering hidden vulnerabilities.
Embedding vulnerability into advice processes
The FCA is clear: vulnerability cannot be treated as an add-on. It must be embedded into every stage of the client journey. This includes:
- Training: All staff must be equipped to recognise and respond to vulnerability. It’s not just for a designated team. Encouraging client disclosure.
- Processes: Firms should have clear, documented procedures for recording and addressing vulnerability, including freeform notes and action plans.
- Monitoring: Outcomes must be tracked to ensure that support is effective and that clients are not left behind.
M&G Wealth Platform have developed a new report bringing together the real experiences of advisers and an industry expert in embedding the requirements into their culture. The report also looks ahead to where technological developments such as AI can add value. All contributors agree that collaboration and shared learning is an essential part of the process, through trade bodies peer networks and external training providers.
Conclusion
Treating vulnerable clients fairly is not just about ticking regulatory boxes. It’s about recognising our shared humanity and ensuring that every client receives the care and support they need to make informed financial decisions.
As the FCA continues to champion outcomes over intentions, advisers must rise to the challenge. Vulnerability is everyone’s business, and it’s time we treated it that way.
Working together to support vulnerable clients
At M&G Wealth Platform we’re committed to working with you to ensure vulnerable clients receive the care and support they need. As part of your ongoing due diligence, it’s important to identify any vulnerabilities your clients may have and let us know.
We’ve made it simple to let us know about any client vulnerabilities. Simply use the contact us form and we’ll update your client’s records accordingly. Our client-facing teams are fully trained to recognise and record additional needs, and to provide the right level of support when it’s needed most.
On our Vulnerable Customer hub you’ll also find a link to the contact us form and links to our client support pages. These contain information and resources for different kinds of vulnerable customers. And a jargon buster to help clients understand those trickier financial terms in plain language.