Flagging vulnerable clients is the start; the Consumer Duty test is whether their outcomes match everyone else's

FG21/1 sets out four areas of action for treating vulnerable customers fairly, and identification is only one strand. The guidance also expects firms to monitor and evaluate, including regularly reviewing management information on the outcomes vulnerable customers receive. The FCA's March 2025 review found outcomes monitoring was still an area for improvement. A count of flagged clients measures recording, not outcomes. The practical step is to split two measures the firm already tracks, such as reviews completed on time and complaints, by the vulnerability flag and explain any gap.

Ask an IFA firm how it handles vulnerable clients and you'll usually hear about identification. The fact-find questions, the flag on the client record, the training advisers had last year. All of that matters. It's also the part of the FCA's guidance that's easiest to evidence, which is why it tends to fill the vulnerability section of a board report.

The harder part sits at the other end of the guidance.

What FG21/1 actually asks for

FG21/1, the FCA's guidance for firms on the fair treatment of vulnerable customers, was published on 23 February 2021. It describes vulnerability as a spectrum of risk and names four drivers: health, life events, resilience and capability. Our guide on how to identify a vulnerable client goes through what to listen for under each driver, and the questions that give a client room to say something.

But identification is only one strand. The guidance groups the actions it expects into four areas: understanding the needs of the target market and customer base; making sure staff can recognise and respond to vulnerability; taking practical action in product and service design, customer service and communications; and monitoring and evaluation. That last area includes producing and regularly reviewing management information on the outcomes the firm delivers for vulnerable customers.

Outcomes. Not flags.

What the FCA found when it looked

In March 2025 the FCA published the findings of its review of firms' treatment of customers in vulnerable circumstances. It analysed survey responses from 725 firms, sent a follow-up information request to 29 firms across 12 markets, and commissioned consumer research. It decided not to revise FG21/1 or add new requirements.

It also said some areas for improvement remain, particularly around products and services and outcomes monitoring. And it noted that consumers in vulnerable circumstances, especially those with several characteristics of vulnerability, may not consistently receive outcomes as good as other consumers.

That points to where the gap sits: less in spotting vulnerability, more in knowing what happened afterwards.

Why a count doesn't answer the question

A board report that gives the number of flagged clients, and how it moved on last year, tells the reader something about the firm's recording. It says very little about whether those clients were served well. A rising count could mean better identification. It could mean a new field on the fact-find.

The Consumer Duty test is comparative, and the handbook makes the link in more than one place; PRIN 2A.4.8R, for instance, requires a value assessment to consider characteristics of vulnerability in the target market and their effect on the likelihood that customers won't receive fair value, which only makes sense if someone is checking whether flagged clients end up where everyone else does.

What a comparison looks like in an advice firm

Look, you don't need new metrics to start. Most firms already track a handful of things per client. Split each one by the vulnerability flag and see whether the two groups diverge.

Measure the firm already holds	What a gap might suggest
Reviews completed on time	Flagged clients are harder to reach, or the service isn't adapting to how they want to meet
Time from meeting to suitability report	Adaptations such as a second meeting are adding delay nobody planned for
Complaints and expressions of dissatisfaction	Communications aren't landing with the people who need them most
Ongoing-fee clients with no review in the period	The fair value question, seen from a different side

A gap isn't proof of harm. There may be good reasons for it, and in a small firm small numbers can swing either way. But an unexplained gap is what the monitoring strand of FG21/1 exists to surface, and the explanation belongs on file.

Recording enough to do it

This only works if the flag is structured. A note buried in free text can't be counted. Health information is sensitive, so the lawful basis and access controls need settling first; our identification guide sets out a practical setup for that. Recording nothing to avoid the question is the weaker position.

A Monday check

Pick two measures you already hold. Split them by flag for the last twelve months. If the flagged group looks the same, write that down with the numbers, because it's evidence. If it doesn't, write down why, and what the firm is changing.

Either result is more use to a board than a count on its own.

How far to take this depends on the firm's size, its client base and what it already records. The guidance itself says firms will need to use their judgement about what each section means for them.

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