Why opening up about financial vulnerability can lead to better support

Everyone deserves financial peace of mind, especially those facing challenges that make managing money more difficult. Yet, according to the Financial Conduct Authority (FCA), only 40% of vulnerable customers disclose their circumstances to their financial services provider. We understand that sharing personal struggles, whether they stem from health issues, unexpected life events, financial difficulties, or digital literacy barriers, can feel daunting.

However, the FCA's findings reveal that those who do open up often receive better, more tailored support. 74% of vulnerable customers who disclosed their situation felt their financial provider asked the right questions, ensuring their needs were understood. Additionally, over half (57%) felt their provider genuinely cared, and 58% said they received the specific support they required.

What makes someone vulnerable?

The FCA defines vulnerability broadly ­- after all, life can throw unexpected challenges our way at any time. Financial vulnerability can arise due to physical or mental health conditions, bereavement, job loss, financial shocks, or simply struggling with digital processes. Because of this, it’s essential that financial services firms provide inclusive, empathetic support for all clients, regardless of their circumstances.

However, research shows that vulnerable customers are more likely to have negative experiences with banks, insurers, and other financial institutions. That’s why the FCA has issued guidance to help firms do better, including the introduction of the Consumer Duty in 2023. This regulation ensures that financial services companies prioritise good outcomes for every customer, especially those in vulnerable situations.

Encouraging a culture of care

Financial planning goes beyond numbers; it’s about people. We encourage our clients to feel comfortable discussing any challenges they face so we can offer the appropriate guidance and solutions. This might involve providing flexible financial strategies, taking extra time to explain complex matters, or simply being a compassionate listener. Our commitment is to make a meaningful difference.

As Sarah Pritchard, the FCA’s Executive Director, stated, “It can be hard to tell your bank or insurer about your specific needs, but those who ask for help tend to feel more supported.” When clients share their concerns, we can work together to find beneficial solutions.

At Carbon, safeguarding our clients' well-being is central to everything we do. We proudly support the Financial Vulnerability Taskforce (FVT) and embrace the 'Financial Vulnerability Charter,' which promotes understanding and responsible practices for addressing consumer vulnerability. Recognising vulnerability is not always straightforward. It often requires attentive listening and careful observation during our interactions with clients, whether over the phone, through written communication, or meeting face to face.

We prioritise training for our team, and our Planners have recently focused on crucial topics such as Alzheimer's, grief, and cancer. This training equips them to identify signs of potential vulnerability and engage with clients compassionately. We aim to create a welcoming environment where every individual feels understood and supported. About the FVT Charter

Your financial well-being matters

The financial services industry has made strides in recognising and addressing vulnerability, but there’s still work to be done. Some clients may hesitate to reach out due to a lack of trust, uncertainty about what support is available, or simply because they don’t want to burden others. However, as AJ Bell’s Tom Selby notes, many firms have dedicated processes in place to assist vulnerable clients, but these processes only work if the firm is aware of the need.

At Carbon, we’re here to help. We see the Consumer Duty as more than just a regulatory requirement - it’s an opportunity to continue building a culture of trust, care, and proactive support. Whether you're facing a temporary setback or a long-term challenge, know that you don’t have to navigate it alone. If you have concerns about your financial situation or need guidance tailored to your unique circumstances, we encourage you to reach out.

Together, we can create a plan that supports your financial well-being - today and for the future. If you would like further information please call 0131 220 0000 or email enquiries@carbonfinancial.co.uk