Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Over a Third of Mortgage Clients Identified as Vulnerable, MorganAsh Reports

A new report from MorganAsh has found that 36% of clients within mortgage firms are considered vulnerable. The findings are based on three years of data from the MorganAsh Resilience System (MARS), which tracks how sectors perform against Financial Conduct Authority (FCA) benchmarks for vulnerable customers.

The report highlights that mortgage firms report a smaller proportion of vulnerable clients compared to advice firms, which have 42% of customers identified as vulnerable. Additionally, 13% of mortgage firm clients are classified as very vulnerable, compared to 22% in advice firms. MorganAsh noted that differences in customer age profiles may contribute to these sector variations.

Across all sectors, the average proportion of vulnerable customers is around 50%, aligning with the FCA’s Financial Lives Survey. In the insurance sector, which MorganAsh says closely reflects the general population, 48% of customers are reported as vulnerable. The debt sector reports the highest proportion, with 99% of customers identified as vulnerable, even when financial vulnerabilities are excluded.

MorganAsh emphasised the importance of firms comparing their vulnerability levels with sector peers, rather than relying solely on overall averages. The MARS system provides a resilience rating for customers, ranging from very resilient to very vulnerable, to help firms assess and monitor vulnerability.

The report also notes that the FCA has recently requested firms to consider the impact of the Iran war when assessing vulnerability, highlighting the need for extensive and robust data. MorganAsh is urging the sector to adopt the Chartered Insurance Institute’s new guidance on managing customer vulnerability, which offers a practical framework for implementing Consumer Duty principles and ensuring consistent data and reporting across financial services.

For UK letting agents and inventory clerks, these findings underline the growing regulatory focus on identifying and supporting vulnerable clients, and the importance of robust data systems to meet Consumer Duty requirements.