Financial services firms must understand the financial impact on disabled clients under the new Consumer Duty rules, MorganAsh has warned.

In a recent report by the Financial Research Centre at the University of Bristol, it was found that three in 10 disabled households are in serious financial difficulty, compared to one in 10 non-disabled households.

Furthermore, many disabled households are struggling to access essential services and advice, with nearly three in 10 (29%) satisfied with the quality of advice or information that was available to them.

Financial services firm, MorganAsh, has said that the report has highlighted that people with conditions such as learning difficulties, mental and physical health conditions, mobility issues, chronic fatigue and memory-loss issues are far worse off.

Managing director at MorganAsh, Andrew Gething, said: “The government has received reports like this for a long time – and is looking for the Financial Conduct Authority (FCA) to prevent disabled people from getting worse outcomes. The industry has said for years that this does not apply to them– but, in practice, has no data to back up this view.

“The FCA therefore now requires all financial services firms to provide evidence that the outcomes of their disabled consumers are – at the least – no worse than those of the resilient. In truth, many people have not picked this up that this is a requirement of Consumer Duty.”

Clause 1.28 of the Consumer Duty guidance states: “The Duty also supports existing legal requirements, such as those in the Equalities Act 2010, by requiring firms to monitor whether any group of retail customers is experiencing different outcomes than other customers and take appropriate action where they do”.

Gething has said that to meet this requirement, firms must, at the very least, report annually on how consumer outcomes are different for those with vulnerabilities and protected characteristics compared to others.

He added: “Under Consumer Duty, every firm must understand the consumers’ characteristics and to report on their outcomes at least annually. This is not easy. While the FCA does not explicitly require firms to assess everyone to achieve this, consumer questionnaires will be by far the most cost-effective method, as undertaking ‘some’ post-assessments will be costly and, inevitably, leave considerable gaps in the data.

“Firms should then be able to demonstrate that their disabled consumers fared as well as the resilient. Only then will firms have the evidence to say, ‘this does not apply to us’.”

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