Wealth is not an insulator against vulnerability says Comentis’ Barrett 

by | Mar 20, 2024

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An important reminder for advisers from Jonathan Barrett, CEO, Comentis, of the need to ensure processes not only serve clients well but also meet the scrutiny of regulators.

During the Financial Conduct Authority (FCA) webinar on ‘Consumer Duty: The next steps’ data was shared on the approach of consumer investment firms to vulnerability. At the time, Head of Consumer Investments, Kate Tuckley, told listeners that the FCA was “exceptionally concerned that firms are just not thinking widely enough on this topic.” 

On top of this, the FCA just released a review of firms’ treatment of customer in vulnerable circumstances (Match 15th) sharing the clearest message yet that the FCA is taking customer vulnerability seriously. 


In the following article, Jonathan Barrett, CEO of Comentis, the duty of care assessment company, discusses Consumer Duty’s impact on vulnerability identification and maintains that wealth is never an insulator against vulnerability -something which advisers will clearly need to consider. 

We have seen it time and time again; the assumption that if someone is wealthy, they cannot be vulnerable. But let’s be clear here. This assumption is very dangerous indeed. Because wealth is not, and will never be, an insulator against vulnerability. 

Data reveals that half of us will be classed as vulnerable at some point in our lives. But according to the FCA’s recent Wealth Data survey, 49% of portfolio managers and a staggering 69% of stockbrokers still haven’t identified a single vulnerable client yet. These shocking figures should come as nothing short of a wake-up call. Consumer Duty sets the expectation that vulnerable customers must be identified, and that their outcomes should be no less favourable than non-vulnerable customers. And while consumer investment firms might well be dealing with high-net worth individuals, being wealthy doesn’t mean that someone is not vulnerable. 


This begs the question then, what are these firms actually assessing for? 

Through our work at Comentis, it should be said that we’ve seen some good progress being made on vulnerability in the adviser community. But for the FCA to have found that such a large proportion of stockbrokers and portfolio managers have identified no vulnerable customers suggests other parties in the distribution of these products aren’t taking the concept of vulnerability so seriously. I’d even go so far as to say that they may not even see vulnerability as their responsibility. This is not good enough. 

This warning from the FCA should send a clear message. Wealthy clients can still be vulnerable, and for the majority of these individuals to have not identified a single at-risk client suggests there are some in the distribution chain who aren’t treating the issue with the required due diligence. 


Another source of real concern, arising from the FCA’s webinar last year, is that a number of firms may be relying on self-identification as a means of screening clients for vulnerability. 

Time and again, we have seen that self-identification simply doesn’t work. For one thing, it’s possible that clients who are aware of their vulnerabilities may try to hide them. They may be embarrassed or 

fearful of suffering negative consequences if they come forward. But it’s much more likely that an at-risk client simply isn’t aware of their own vulnerability. 

This may sound unlikely at first. But consider the fact that there isn’t a universal definition of vulnerability. In the context of this particular conversation, vulnerability is a construct defined by the FCA, with an entirely different set of criteria to those used in other sectors. How then, can a client, especially a client who happens to be wealthy, be relied upon to identify themselves as financially vulnerable in the eyes of the regulator? It simply doesn’t work, and leaves the firm extremely exposed. 

I think we can make a small concession in that managers and brokers may not always have direct dealings with a client, a factor which undoubtedly adds an extra layer of complexity. But self-identification is clearly not the answer. And nor are assumptions. What brokers and managers need are the means (and the data), to accurately identify signs of vulnerability in large numbers with whom they have no direct contact. 

The best way to achieve this is with data and a systematic process for screening clients and appropriate accommodations for the needs of those at risk. By combining clinical expertise with hard data, these kinds of solutions can remove bias and subjectivity from the process, ensure consistency across a whole client base and reassure firms that their systems will adequately meet the scrutiny of regulatory requirements. 


Comentis is the duty of care assessment company. Established in 2021, the reg tech firm uniquely combines technology with clinical expertise to identify vulnerable customers who would otherwise go undetected. Its cost-effective digital vulnerability assessments enable clients across a full range of financial services verticals including, wealth, automotive finance and consumer finance to consistently and objectively identify vulnerable customers, support them with suggested appropriate actions and report on vulnerability data. In so doing, firms are able to comply with regulatory requirements under the Financial Conduct Authority (FCA), deliver good outcomes for their customers and mitigate future risk. Comentis also provides a range of digital mental capacity assessments enabling care providers and the legal sector to meet their requirements by identifying if their patients/clients have the necessary understanding and ability to make specific capacity decisions.

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