The Consumer Duty Alliance, the not-for-profit industry group supporting advisers with their Duty commitments, has called for the FCA to issue more sector-specific guidance on vulnerability.

Better guidance is required for advisers, especially in relation to good practice and outcomes, according to the CDA.

The call from the industry group follows the FCA’s publication of its findings from its latest vulnerability review earlier this month.

The review found a small number of firms in the wealth and asset management sector had identified very few customers in vulnerable circumstances.

Keith Richards, CEO of the Consumer Duty Alliance, warned that advisers may read the latest FCA publication and dismiss its relevance to them.

He said: “We commend the FCA on its engagement strategy in relation to this latest vulnerability review, but the examples of good practice are too generic and naturally based on all sectors of retail financial services. The examples and language used therefore do not always resonate with the Financial Planning community, which highlights the need for more sector-specific guidance.

“Some good and poor practice examples will naturally read across to all sectors but banks, lenders and product providers have a much wider consumer demographic than advice firms, and this can have the unintended consequence of suggesting to advisers, wealth managers and stockbrokers that this is not so relevant for them.”

The FCA stated that most firms in its multi-firm work into outcomes monitoring were unable to show how they effectively monitor and take action on outcomes for customers in vulnerable circumstances. The CDA believes that the first step for advice firms is to recognise the wide spectrum of vulnerability and introduce a systematic process for screening all clients.

Mr Richards added that the FCA regulates a very broad range of financial businesses but should have more focus on guidance tailored to the advice sector if it is to drive better understanding and outcomes.

The Consumer Duty Alliance has more than 20,000 members and 100 affiliates and was set up to help advisers with their commitments to the FCA’s new Consumer Duty in March 2023.

The CDA states its purpose is to inspire greater confidence and trust in the financial advice sector.