" While brokers are increasingly aware of client vulnerability, these findings highlight a need for deeper, practical support. "
- Jess Rushton, head of business development at Smart Money People
New research has found that while almost nine in 10 (89.1%) brokers have encountered a vulnerable client in the past year, two fifths (40.7%) never share vulnerability information with lenders, with over half (58.2%) of brokers citing the lack of lender clarity regarding how and where to disclose vulnerability information as a key barrier.
The client vulnerability and broker understanding research was commissioned by Smart Money People and facilitated by Newcastle for Intermediaries.
The FCA defines vulnerability as ‘someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.’ Vulnerability is often hidden, can be temporary or long-lasting, and can impact anyone. The 2022 Financial Lives Survey revealed that 47% (or 24.9 million) of UK adults showed one or more characteristics of vulnerability.
Nearly half of the respondents (47.9%) expressed a need for deeper understanding around the drivers and the importance of identifying vulnerable customers, with brokers requesting resources such as dedicated areas on lender websites (71.8%), detailed written guidance (32.2%) and training (27.6%) to be made available to support them in delivering positive outcomes for their vulnerable clients.
Michael Conville, chief customer officer at Newcastle Building Society, said: “Fostering a culture of Diversity, Equity and Inclusion is one of the five strategic priorities at our Society, and so it’s important that we better understand vulnerability in all its forms so that we are able to support brokers in a way that delivers the best possible outcome for their clients. Being able to bring together mortgage lenders to discuss and raise the standards available across the industry reflects our wider purpose to support this area.
“Our shared commitment is to ensure every customer has a positive experience, whether it's providing clearer guidance, improving education, or leveraging technology to streamline processes. Taking a collaborative approach to drive action is key to enabling positive change across brokers and lenders. We're proud to have facilitated this working group, which will be instrumental in shaping the future of the industry and ensuring positive customer outcomes.”
Jess Rushton, head of business development at Smart Money People, commented: "While brokers are increasingly aware of client vulnerability, these findings highlight a need for deeper, practical support. A better understanding of vulnerability drivers, along with standardised processes and clearer guidance from lenders, could empower brokers to confidently support clients who may otherwise hesitate to disclose their circumstances."
Rob Sinclair, chief executive at the Association of Mortgage Intermediaries (AMI), added: “AMI were delighted to be asked to support this initiative on what remains one of the key areas in most firms Consumer Duty projects where greater clarity is required. The research helps identify where the issues are and give clarity on steps which could be taken to improve support, communication and outcomes. Our hope is the industry through its trade bodies can impel firms to work together to deliver consistent policies and processes.”
