Recent research has revealed that disabled households are three times more likely to experience serious financial difficulty compared to non-disabled households. Additionally, these households struggle to access essential services and advice, with only 29% satisfied with the available support. Under the Consumer Duty, financial services firms have a responsibility to understand and address the financial impact of disability.
In a report by the Personal Financial Research Centre at the University of Bristol, it was found that 30% of disabled households are facing serious financial difficulties, while only 10% of non-disabled households are in the same situation. This highlights a significant disparity in financial outcomes between these two groups.
Furthermore, the report revealed that disabled households are struggling to access essential services and advice, with only 29% satisfied with the quality of advice or information available to them. This poses a significant challenge for individuals with disabilities who may require specialized financial support and guidance.
Recognizing the importance of addressing this issue, MorganAsh managing director Andrew Gething emphasized the responsibility of financial services firms under the Consumer Duty. He stated that these firms must identify, record, and report on the financial impact of disability. Gething pointed out that while the industry has claimed that this requirement does not apply to them, there is a lack of data to support this view.
To address this gap, the Financial Conduct Authority (FCA) now requires all financial services firms to provide evidence that the outcomes of their disabled consumers are, at the very least, no worse than those of the resilient. This means that firms need to monitor and report on how consumer outcomes differ for those with vulnerabilities and protected characteristics compared to the resilient.
Under the Equalities Act, protected characteristics include individuals with progressive conditions such as cancer, HIV, or MS, even if they are still able to carry out normal day-to-day activities. This highlights the need for firms to consider a wide range of disabilities and conditions when assessing consumer outcomes.
Gething suggested that firms can meet this requirement by reporting annually on how consumer outcomes differ for those with vulnerabilities and protected characteristics. While the FCA does not explicitly require firms to assess everyone, Gething argued that consumer questionnaires would be the most cost-effective method to gather this information. This approach would provide firms with the necessary data to demonstrate that their disabled consumers are faring as well as the resilient.
MorganAsh has developed a tool, the MorganAsh Resilience System (MARS), which enables firms to assess, manage, and report on vulnerable consumers in compliance with the Consumer Duty requirements. The system allows firms to collect ‘protected characteristics’ data directly from consumers as part of the vulnerability assessment process. It provides automated reports on these characteristics and recommended treatments, ensuring compliance with the Consumer Duty, UK GDPR, and the Equalities Act.
In conclusion, financial services firms must recognize the financial impact of disability and take proactive measures to address the needs of disabled consumers. The Consumer Duty requires firms to monitor and report on consumer outcomes for those with vulnerabilities and protected characteristics. By doing so, firms can ensure that disabled consumers receive the same level of financial support and outcomes as their resilient counterparts.
