Investment firms: Bereaved customer treatment

The intent of the review is to understand both the processes in place to support customers through the bereavement process and, importantly, how effective these processes are in practice. This requires firms to provide copies of controls including management information (MI), reporting, quality assurance (QA), and outcomes testing that assess the effectiveness of the processes and the intent.

There was some consistency in areas for improvement across Retail Banking and Insurance. These included:

• MI and reporting focused on SLA’s rather than outcomes
• Resource, training and competency challenges
• Measuring effectiveness of activities within the journey rather than the E2E journey

The FCA have already undertaken similar reviews in Insurance and Retail Banking.

Available data

We have reviewed c150 FOS final decisions for investment firms that include references to bereavement cases.  

The upheld rate for these cases was 35% - similar to the overall upheld rate for FOS cases. However there were some interesting trends:

1. Only 7% of these upheld cases included reference to vulnerable customers.
2. 31% included reference to “communication” and 26% included reference to “standards.”
3. “Fees” and “Charges” featured in 63% of the upheld cases.
4. For a number of firms 100% of the upheld cases included issues with “Fees” or “Charges.”

Firms could undertake a targeted review of bereavement related fees and charges, focusing on:

• Whether fees are fair, reasonable, and aligned with Consumer Duty
• Whether bereavement should trigger fee waivers or reduced charges
• Whether fee explanations are clear, timely, and accessible

Selected firms

If you are one of the selected firms, the approach and findings of previous reviews could help you prepare for this review. Where possible, information should be provided in a manner that allows the FCA to easily understand the E2E journey alongside evidence of how MI and outcomes testing is used to enhance processes that support customers. 

Where firms already have plans in place to address identified weaknesses, providing evidence of how these plans are implemented, managed and tested to ensure they are effective will help demonstrate cultural alignment to meeting customer needs. 

Firms who are not included in the review

The FCA summarised next steps following the Insurance and Retail Banking reviews. Their statements included: 

• “No firm can afford to be complacent in this area.” (Retail Banking Review) 
• “Relevant Senior Management Function holders should carefully consider the contents of this review and take any necessary steps to make sure that their firm is operating in line with our expectations.” (Insurance review) 

If you are not included in this review, consider undertaking an internal review to determine how effective your existing processes are, identify any weaknesses and put a plan in place to address them.

Authored by Ben Goodman, Caroline Walters, and Mark Aengenheister.