Vulnerable clients in financial advice: spotting the signs in meetings

Clients rarely announce that they are vulnerable. They mention a hospital appointment in passing, say their late husband always dealt with the pensions, or ask the same question twice. In a busy meeting focused on valuations and recommendations, those moments are easy to miss. Yet for vulnerable clients, financial advice that does not adapt to their circumstances can cause real harm.

This guide covers how the FCA defines vulnerability, what its latest figures show, what to listen for in client meetings, and how to record what you did about it.

How the FCA defines a vulnerable customer

The FCA's guidance on the fair treatment of vulnerable customers, FG21/1, published in February 2021, gives the definition at paragraph 1.1: "A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care."

Two points in that definition are worth holding on to. Vulnerability arises from personal circumstances, so it can come and go. And the second half places weight on the firm: harm is most likely when the firm is not taking appropriate care.

FG21/1 groups the drivers of vulnerability into four areas:

• Health
• Life events
• Resilience
• Capability

For advice firms, paragraph 2.11 is particularly relevant: "firms that advise on investments and pensions have an older customer base, so common characteristics of vulnerability may involve health and life events associated with old age."

What the figures show

The FCA's Financial Lives 2024 survey found that "26.4 million had characteristics of vulnerability in May 2024 (49% of all UK adults)".

The FCA's financial advice firms survey 2025 paints a different picture inside advice firms: "12% of retail clients have characteristics of vulnerability; 5% supported with service adjustments".

The two surveys measure different things, so the figures are not directly comparable. But the gap between nearly half of UK adults and 12% of advice clients is worth reflecting on, as is the gap between 12% identified and 5% given adjustments. Identification is also a stated FCA priority. Its Consumer Duty focus areas for advice and wealth include "Tackling poor identification of clients with characteristics of vulnerability by wealth managers".

Spotting vulnerable clients in financial advice meetings

Most characteristics of vulnerability surface in conversation rather than on a form. The cues below are examples to listen for, grouped by the FG21/1 drivers. None is proof of vulnerability on its own. Each is a prompt to ask a gentle follow-up question.

Health

• mentions of a diagnosis, treatment, medication or hospital visits;
• difficulty hearing, seeing documents or following a long meeting;
• signs of memory difficulty, such as repeating questions or forgetting earlier decisions.

Life events

• a recent bereavement, divorce or separation;
• redundancy, retirement or a sudden change in income;
• becoming a carer, or a family member taking on a larger role in decisions.

Resilience

• little or no emergency cash, or reliance on a single income;
• visible anxiety about money, or about falls in value;
• debt worries mentioned in passing.

Capability

• a client who says a partner always handled finances;
• agreeing quickly without asking questions, or seeming reluctant to say they do not understand;
• difficulty with digital tools the service relies on.

Talk share matters here. If the adviser speaks for most of the meeting, the client has less room to mention the things that matter. Open questions such as "How have things been since we last met?" give clients space to raise them. We cover technique in more depth in open questions in client meetings.

Recording characteristics and adjustments

Identifying vulnerability is only the first step. The record should show what the firm did as a result. A useful record covers:

1. What was observed or said, in the client's own words where possible, and when.
2. Which driver it relates to, using the FG21/1 categories.
3. How it might affect the advice or the service, for example the need for more time, a different format or a trusted person present.
4. The adjustment made, such as larger print, shorter meetings, written summaries after each call, or more frequent contact.
5. How the information is handled, including what the client has been told about what is recorded and how it will be used. Personal data rules apply here, and FG21/1 has an appendix on data protection to check your approach against.
6. A review point, because circumstances change and a temporary characteristic may pass.

The aim is a record that would let a colleague pick up the relationship and serve the client properly. Vulnerability records also feed your Consumer Duty monitoring, which we discuss in Consumer Duty evidence for advice firms.

Using recorded meetings to check what was missed

Where firms record and transcribe client meetings, the transcripts often sit unread. That is a missed opportunity, because the transcript holds the exact words a client used.

Asclto connects to Fireflies and turns each recorded meeting into a scored report. It measures talk share between adviser and client, counts open and closed questions and the questions the client asked, and finds the longest adviser monologue. It reads tone of voice from the audio, picks out key moments with the exact words that earned them, and includes an FCA checklist of what the meeting did and did not evidence. Every figure is checked against the transcript. The report is an internal coaching record, exported to PDF and never shared with the client. By our estimate, reviewing a meeting this way takes minutes rather than an hour.

For a structured assessment, Freeboard scores advisers, from their recorded meetings, against your firm's skill profiles and assesses vulnerability separately from attitude to risk, capacity for loss and knowledge and understanding, with every conclusion quoted from the client's own words.

Neither app decides whether a client is vulnerable. They make it easier for a supervisor or adviser to see what was said, what was asked and what was missed. The judgement, and the adjustments that follow, stay with the adviser and the firm.

Frequently asked questions

What are the four drivers of vulnerability?

FG21/1 sets out four drivers: health, life events, resilience and capability. Paragraph 2.11 notes that firms advising on investments and pensions have an older customer base, so characteristics may often involve health and life events associated with old age.

How many advice clients have characteristics of vulnerability?

The FCA's financial advice firms survey 2025 found "12% of retail clients have characteristics of vulnerability; 5% supported with service adjustments". Financial Lives 2024 found 49% of all UK adults had characteristics of vulnerability in May 2024.

Is vulnerability permanent?

Not necessarily. The FG21/1 definition links vulnerability to personal circumstances, which can change. That is why records should include a review point.

To see how Asclto reviews a recorded meeting, read about Asclto or book a twenty-minute demo with Adam Booth on Microsoft Teams. It runs live on a demo firm with its own clients and meetings, so there is nothing to prepare.