Data from the MorganAsh Resilience System divided clients into 10 categories ranging from ‘very vulnerable’ to ‘very resilient’. This has been split into three groups of ‘in difficulty’, ‘potentially vulnerable’ and ‘resilient’ for the analysis.
Some 49 per cent of clients in the high net worth space showed signs of potential vulnerability, followed by 44 per cent of protection clients.
This was followed by 43 per cent of customers in the equity release market who were deemed ‘potentially vulnerable’.
Firms using the platform recorded that 49 per cent of consumer credit clients were already ‘in difficulty’, while 38 per cent of mortgage clients fell under the same category. The smallest proportion of ‘in difficulty’ clients were found in the protection sector at five per cent, while equity release had nearly a quarter.
MorganAsh said the high levels of vulnerability for credit companies was probably because of increasing financial vulnerability, while the low base in the protection sector was due to the pre-selection process.
Across all sectors, 19 per cent of clients were classified as being ‘in difficulty’ while 45 per cent were classified as ‘potentially vulnerable’. Over a third, 36 per cent, were considered ‘resilient’.
MorganAsh said its data was similar to findings from the Financial Conduct Authority’s Financial Lives Survey which in 2017 found that 50 per cent of consumers in the UK had some form of vulnerability.
Andrew Gething (pictured), managing director of MorganAsh, said: “It is still early days from the introduction of Consumer Duty, but some firms are starting to provide good data on the vulnerability of their customers. We should emphasise that our data is representative of the firms we are working with, so should not be taken as gospel.
“While every consumer is unique and each firm will have a different set of consumers, there is real value in benchmarking ourselves across different sectors.”
A disparity between firms
Gething added: “Worryingly, there is still a huge disparity in views on the proportions of vulnerable consumers at any one time. Some firms are still stating that they don’t have any vulnerable customers, even though we are all vulnerable at some point in our lives. The recent Dear CEO letter, issued by the Financial Conduct Authority, highlighted the prevalence of this view among wealth management and stockbroking firms in particular.
“Hopefully publishing the mean figures will help firms to judge their own figures against these industry norms.”