Smart Money People, a review site for the financial services sector, carried out research on vulnerability disclosure following its broker study in collaboration with Newcastle Building Society last year.
This survey looked at the lender perspective and had 600 respondents.
Smart Money People collected responses from a broad range of roles, including business development managers (BDMs), underwriters, compliance and operational.
It found that just 58.1% of brokers felt the sector made progress in supporting clients with vulnerabilities, as a higher proportion than last year said they disclosed “most” or “all” cases to lenders. However, around a third said they did not disclose any cases at all.
The firm said internal recording practices might explain why lenders were not receiving vulnerability disclosures, meaning these concerns were not reaching lenders.
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Smart Money People found that brokers and lenders reported high confidence in identifying and responding to vulnerable customers. However, awareness of what the Financial Conduct Authority (FCA) sees as vulnerability varied, particularly among lenders.
Brokers reported that barriers to disclosures included a lack of clarity or inconsistency with systems, while lenders said this was because clients were reluctant to disclose or scared of a negative impact.
Smart Money People said this showed a need for clearer communication and shared accountability.
Brokers said they wanted simple, practical tools for disclosure, such as this being integrated into applications and reassurance around non-discrimination.
Lenders prioritised dedicated online areas, expert insight and training. The survey revealed that both groups wanted more structured guidance but had different priorities.
Awareness does not always mean action
Jess Trueman, head of business development at Smart Money People, said: “This year’s research shows a market moving in the right direction but still held back by structural and cultural barriers that prevent consistent vulnerability disclosure.
“Brokers are confident in their understanding of vulnerability and most encounter it regularly in their client base. Encouragingly, more brokers now say they disclose ‘most’ or ‘all’ cases to lenders compared with 2024. But almost a third still disclose none – a reminder that awareness does not always translate into action.”
She added: “Lenders report high confidence in their ability to act on disclosures but admit they receive them only rarely. More than half said they had not received a single disclosure in the past year, a stark contrast to brokers’ claims of increasing disclosure. This disconnect exposes weaknesses in the routes, systems, and consistency of communication between intermediaries and lenders.
“The overall conclusion is clear: the knowledge is there, the willingness is there, but the infrastructure to support consistent disclosure is still not fit for purpose.”
