More than two-fifths – 41% – of brokers never share information on client vulnerabilities with lenders, despite 89% coming across vulnerable clients, a study showed.
Research commissioned by Smart Money People and carried out by Newcastle for Intermediaries found that 58% of brokers were not sure about how or where to disclose this information to lenders.
This was despite 18% of respondents saying more than a quarter of their clients were vulnerable.
Understanding vulnerability
Some 48% of the 245 brokers polled said they needed more understanding of the importance of identifying vulnerable clients.
Most respondents – 78% – said they received adequate training on what makes a vulnerable client, but almost a fifth wanted more training and guidance.
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Nearly two-thirds – 63% – said they were confident about understanding the categories of vulnerability but not so confident about the required accommodations or advising others on how to manage vulnerable clients.
More support from lenders
Brokers called for more guidance from brokers, as 72% said there was a need for dedicated sections on lender websites.
Most of the brokers polled said they did not get specific training from lenders on vulnerability, and when they did, it was “minimal and generally insufficient”.
More than half – 51% – wanted a guide on how to disclose vulnerabilities.
Raise standards in the sector
Michael Conville, chief customer officer at Newcastle Building Society, said: “Fostering a culture of diversity, equity and inclusion is one of the five strategic priorities at our society, and so it’s important that we better understand vulnerability in all its forms so that we are able to support brokers in a way that delivers the best possible outcome for their clients. Being able to bring together mortgage lenders to discuss and raise the standards available across the industry reflects our wider purpose to support this area.
“Our shared commitment is to ensure every customer has a positive experience, whether it’s providing clearer guidance, improving education, or leveraging technology to streamline processes. Taking a collaborative approach to drive action is key to enabling positive change across brokers and lenders. We’re proud to have facilitated this working group, which will be instrumental in shaping the future of the industry and ensuring positive customer outcomes.”
Jess Rushton, head of business development at Smart Money People, added: “While brokers are increasingly aware of client vulnerability, these findings highlight a need for deeper, practical support. A better understanding of vulnerability drivers, along with standardised processes and clearer guidance from lenders, could empower brokers to confidently support clients who may otherwise hesitate to disclose their circumstances.”
The Financial Conduct Authority (FCA) defines vulnerability as “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.”
Its 2022 Financial Lives Survey revealed that 47% of UK adults showed one or more characteristics of vulnerability.
Rob Sinclair, chief executive of Association of Mortgage Intermediaries (AMI), said: “AMI were delighted to be asked to support this initiative on what remains one of the key areas in most firms’ Consumer Duty projects where greater clarity is required.
“The research helps identify where the issues are and give clarity on steps [that] could be taken to improve support, communication and outcomes. Our hope is the industry, through its trade bodies, can impel firms to work together to deliver consistent policies and processes.”
