Andrew Gething, managing director at MorganAsh, in response to the latest research from the Financial Services Consumer Panel on later life lending, says “This research highlights some important issues for the later life lending market, and how they implement strategies for vulnerable customers in order to meet FCA regulations and do best by the customer.
“It is important to understand the consumer’s characteristics and vulnerabilities at the point of sale, to ensure that best advice is given and the transaction is appropriate. This raises the a need for a systematic way to screen all applicants for products, as part of the advice process. Many in the industry are only looking at vulnerability when it is highlighted to them, from existing customers, whereas every customer really needs to be screened in this way and right at the start of the process.
“The FCA’s consumer panel encourages the use of tools – and indeed there is a growing need to collate, assess and store data on customer vulnerability in a systematic and objective manner.
“The flaw in the FCAs research is the limited sample size of only 45 interviews, comprised of people who were paid for their time, as this is not truly representative.
“However, the research remains valid and this calls for the industry to collate far better data on vulnerability and consumer outcomes. This means the systematic recording and objective assessments of consumer characteristics as well as outcomes, in order to provide reliable data for all parties and fundamentally ensure that the customer is always given the right advice and provided with the right product for their needs.”