FCA issues new guidance to support bereaved customers

The FCA has announced new guidance aimed at helping financial services firms provide more effective support to customers who have experienced bereavement. This marks a significant step in the regulator’s ongoing commitment to ensuring vulnerable customers are treated fairly and compassionately.

Building on the existing Guidance for firms on the fair treatment of vulnerable customers (FG21/1), and closely related to the principles underpinning Consumer Duty and the general regulatory direction of travel, the latest update places particular emphasis on the challenges faced by bereaved individuals when interacting with financial services.

A renewed focus on bereavement

The loss of a loved one can leave individuals in an acutely vulnerable position, often resulting in financial and administrative responsibilities and challenges. The regulator has noted that, while many firms are making strides in supporting vulnerable customers, further progress is needed to ensure consistently good outcomes for bereaved customers across the sector.

The new guidance highlights key expectations for firms:

• Empathetic processes, delivered with pragmatism: firms are expected to implement clear and empathetic processes to identify bereaved customers and understand their specific needs
• Staff training: Employees should receive training to handle bereavement-related enquiries with sensitivity and flexibility, ensuring customers feel supported
• Reasonable adjustments: Firms should consider adjustments such as waiving fees, extending deadlines, or offering additional support tailored to the customer’s situation
• Robust oversight: Effective governance and oversight mechanisms should be in place to monitor how bereavement support measures are being delivered and to evaluate their impact on customer outcomes

Preparing for change

The FCA’s announcement is both a call to action and an opportunity for financial services firms to demonstrate their commitment to customer-centric practices. Preparing to meet these new expectations requires a thorough review of existing bereavement policies, processes, and support frameworks.

To align with the FCA’s guidance, firms should:

1. Evaluate existing frameworks: Assess the effectiveness of current bereavement policies and practices, identifying any gaps or areas for improvement.

1. Develop customer-centric policies: Create or update policies to ensure they are flexible, empathetic, and responsive to the diverse needs of bereaved customers.

1. Train staff effectively: Equip employees with the skills and knowledge to handle bereavement-related interactions compassionately, ensuring consistency across all customer touchpoints.

1. Monitor outcomes: Establish robust mechanisms to measure and report on customer outcomes related to bereavement, using insights to drive meaningful improvements.

Proactive approach for positive impact all round

The FCA’s guidance serves as a reminder of the financial services sector’s vital role in supporting customers during life’s most challenging moments. Firms that proactively implement these recommendations can enhance trust, build stronger customer relationships and demonstrate a genuine commitment to fair treatment.

By taking a proactive approach, firms can ensure their bereavement support policies not only meet regulatory expectations but also provide the compassionate care that bereaved customers need and deserve.

The FCA’s announcement represents the ongoing development and refinement of standards for the treatment of vulnerable individuals. Taking the time to review and embed best practices will not only ensure compliance but also make a real difference in the lives of bereaved customers.

Read the FCA's full press release last month.