The Financial Conduct Authority has launched a review into how consumer investment firms support bereaved customers and whether they’re getting it right.
It follows research that revealed less than half (47%) of bereaved customers felt they received the support they needed from financial firms.
The regulator’s review will focus on firms that advise, manage or administer investments, including platforms, advisers and wealth managers. It will examine the experience customers have from the moment the firm is told about a bereavement, through to settlement or transfer of investments, assessing how firms communicate, how they support vulnerable customers, their service standards and how fees are handled on bereaved accounts.
Kate Tuckley, head of department, consumer investments, at the FCA, said: “When someone loses a loved one, the last thing they need is confusing letters, delays and poor service from their financial provider.
“We want firms to design bereavement processes with people, not paperwork, at their centre. These processes are a real test of a firm’s culture and key to consumer trust.”
This latest review follows similar FCA reviews in retail banking and insurance, where it found bereaved customers regularly faced unclear processes, repeated information requests and avoidable delays.
While good practice existed within retail banking and insurance, the FCA acknowledged that it wasn’t consistent.
From May, the FCA will contact selected firms as part of the review and plans to publish findings later this year, highlighting good practice and areas for improvement.
Winston Ruddick, senior consultant at Broadstone, welcomed the review: “Bereavement is one of the clearest examples of customer vulnerability and delays, poor communication and confusing processes can add significant stress for families trying to manage a loved one’s finances at an already difficult time.
“While many firms have made improvements in recent years, it is clear that customer experiences remain inconsistent across the investment and financial planning market. The FCA is sending a clear message that bereavement processes should be built around empathy, clarity and timely support rather than administration alone.
“For firms, this is also a real test of Consumer Duty in practice. Those that can combine efficient administration with compassionate customer support will be far better placed to build long-term trust with clients and their families.”
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