Understanding Vulnerable Clients & How to Manage Them

According to the UK’s Financial Conduct Authority’s Occasional Paper No. 8, a vulnerable client is an individual “who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”

Vulnerability per se comes in all shapes, sizes, and colours.

Being vulnerable is something fluid in nature, as it can occur on a temporary, occasional, or permanent basis.

Furthermore, firms might play a role in making their own clients vulnerable. A firm’s actions, procedures, or modus operandi can cause or exacerbate a customer’s level of vulnerability.

With all of these factors to consider, it is imperative for firms to know how to handle and manage vulnerable clients, and act in ways that will not generate or amplify vulnerability among their clientele.