Under the Consumer Duty, an adviser firm has to show that clients in vulnerable circumstances get outcomes as good as other clients. A vulnerability policy and a training log are not that evidence, and when the FCA looked in 2025, most firms could not produce it.
This article sets out what the FCA means by a vulnerable customer, what it found, and what evidence of outcomes looks like for an adviser firm working from its own back office.
What the FCA means by a vulnerable customer
The FCA defines a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care”. It names four drivers:
- Health, such as cognitive impairment.
- Life events, such as new caring responsibilities.
- Resilience, meaning low ability to withstand a financial or emotional shock.
- Capability, such as poor literacy or numeracy.
The aim is stated plainly: vulnerable customers should “experience outcomes as good as other consumers”. That guidance (FG21/1) still stands. In March 2025 the FCA said it would not update it, because firms find it useful alongside the Consumer Duty.
What the FCA found when it looked
In March 2025 the FCA published its review of how firms treat customers in vulnerable circumstances. It surveyed 725 firms and followed up on outcomes monitoring with 29 firms across 12 markets. The findings that matter most for an adviser firm:
- Most firms “were unable to effectively monitor outcomes for customers in vulnerable circumstances”.
- Poor or thin data stopped firms measuring outcomes at all.
- Firms tracked process, such as call metrics and training records, rather than what happened to the customer.
- Firms were often unclear on what a good or a poor outcome looked like, and on when a poor one would be escalated.
The management information firms relied on tells the same story. Of the firms that answered the FCA’s voluntary survey, 79% said they used complaints data, 78% staff feedback and 64% quality assurance findings. Far fewer used feedback directly from customers in vulnerable circumstances (49%), behavioural data (36%) or take-up of extra support (29%). Only 39% of those firms had a formal governance body overseeing these outcomes.
One point lands on wealth firms directly. The FCA noted that a small number of firms, mainly in wealth and asset management, had identified zero or very few vulnerable customers.
The FCA is also looking at advisers on one driver. In May 2026 it announced a review of how firms that advise on, manage or administer investments support bereaved customers, including how fees are handled on bereaved accounts.
Why this is hard for an adviser firm
The reality is most adviser firms know their clients well. The adviser knows who lost a partner last year and who now brings a son or daughter to meetings. The problem is that knowing is not evidence.
In most back offices, vulnerability sits in free-text notes. It is not dated, not consistent between advisers and not easy to count. A firm can show it has a policy and that staff were trained. It struggles to show that a flagged client received the same service, at the same value, as the rest of the book.
What evidence of outcomes looks like
Turn each FCA question into something your own records can answer:
- Are we identifying vulnerability? Clients flagged, by adviser and by driver, and how that changed over the year. Zero or very few is a finding in itself.
- Do flagged clients get the service they pay for? Review completion and contact for flagged clients, set against everyone else.
- Do they get fair value? Fees paid and service received for flagged clients, set against the rest of the book.
- Do they understand what we send? Complaints, queries and follow-up requests from flagged clients.
- What did we do about poor outcomes? Each action logged with an owner and a date, and whether the gap closed.
Two rules keep the evidence honest. Assess vulnerability client by client, never averaged across a household, because one partner can be vulnerable when the other is not. And keep the comparison running: one snapshot shows where you are, the trend shows whether your actions worked.
How Pillar helps
Pillar Lens reads a firm’s Intelliflo data and puts every client on one line: ongoing fee, allocated cost to serve and assets under management. It shows which clients cost more to serve than they pay and where service records are missing, so a firm can set the service and value its flagged clients receive against the rest of the book.
Where reviews are the gap, the client review service runs reviews for the clients a firm chooses, inside the firm’s own brand and systems. Anything that suggests a client may be vulnerable goes back to the firm’s adviser with the context.
Pillar gives no regulated advice. The firm’s own people decide how each client is treated.
Related: how to assess fair value on your ongoing fee. To see what Lens shows on your own book, book a call.
Frequently asked questions
Do adviser firms have to compare outcomes for vulnerable clients with other clients?
The FCA wants vulnerable customers to experience outcomes as good as other consumers. In practice that means comparing service, value and understanding for clients with characteristics of vulnerability against the rest of the book, and acting on any gap.
What if we have identified very few vulnerable clients?
Treat it as a question about how you identify, not proof that your book has none. The FCA singled out wealth and asset management firms that had identified zero or very few.
Is the FCA updating its vulnerability guidance?
No. In March 2025 the FCA said it would not update FG21/1. The guidance stands alongside the Consumer Duty.
Sources: FCA, Guidance for firms on the fair treatment of vulnerable customers (FG21/1), published 23 February 2021, last updated 22 July 2026; FCA, Firms’ treatment of customers in vulnerable circumstances and FCA, Delivering good outcomes for customers in vulnerable circumstances, both published 7 March 2025; FCA, review of support for bereaved customers, 13 May 2026. All read 20 October 2026. General information for regulated firms, not regulatory or legal advice.