Vulnerable clients: what mortgage advisers need to know

Here are some practical pointers to help your business stay compliant and truly customer-focused when it comes to vulnerable clients. 

Mind your language 

Let’s start with terminology. The word ‘vulnerable’ is used by the regulator and has been picked up by the industry, but it’s not language we should necessarily use directly with clients. Very few people self-identify as ‘vulnerable’, and some may find the label inappropriate or even offensive – or worry that being identified as ‘vulnerable’ could reduce their eligibility to borrow. It can make sense to avoid using the term ‘vulnerable’ in client conversations. Instead, focus on understanding and responding to individual needs and circumstances. 

Record-keeping that reflects real care 

One of the biggest challenges in this area is evidencing what you’ve done to support clients with additional or specific needs. The FCA isn’t just interested in your good intentions - they want proof. 

Here’s what robust record-keeping looks like: 

That last point is crucial. The FCA will not accept “we don’t have any vulnerable clients” as an answer. If your assessment concludes that no adjustments were needed, that decision must be justified and documented. 

Also consider what adjustments were offered or requested; whether the lender was informed where necessary and whether you possess documented client consent to share their information with third parties. Remember, email correspondence can be especially helpful as it provides a date- and time-stamped record showing actions taken and client consent. 

When the FCA Comes Knocking: Are You Ready? 

If the FCA requests data, you may be expected to respond quickly—often within a matter of days. And while they won’t ask for detailed personal data, they will expect anonymised Management Information (MI) that tells the story of how your business supports vulnerable clients. 

Here’s what you should have ready: 

Ask yourself: 

The FCA doesn’t expect perfection, but they do expect transparency and continuous improvement. Identifying and addressing problems is all part of compliance. 

Build Seamless Systems Now to Avoid Pain Later 

Let’s be honest, none of this is enormously exciting. But unless your MI is collected and stored in real time, you could face a major administrative headache if a Dear CEO letter lands on your desk. 

On a personal note, I once spent a particularly frustrating Christmas break manually pulling data together for the FCA. It’s not an experience I’d recommend. 

Supporting clients with additional needs is not only a regulatory requirement under the Consumer Duty—it’s the right thing to do. By avoiding jargon, documenting your approach thoroughly, and building systems that make it easy to report on your practices, you’ll be in a much stronger position to provide evidence that you have treated all of your clients fairly. If the FCA calls, you’ll be ready - not scrambling.