5.6 million UK investors fall into the FCA’s definition of vulnerable

A new report published today by Boring Money finds that 34% of the UK’s 16.2 million investors are classified as vulnerable according to the FCA’s new Consumer Duty classification.

This includes investors who need special consideration because of 1) health, 2) life events, 3) financial resilience and/or 4) capability (knowledge and confidence).

• Thinking about confidence alone, a significant 27% of all investors say that their confidence about investing is 2 or less out of 10.

• If we ask investors about physical, emotional and financial vulnerability, 1 in 5 of all investors today self-classify as vulnerable.

• These vulnerable customers are more likely to be young, female and less well-off. The median asset value for vulnerable investors is £38,000 compared to £100,000+ for non-vulnerable investors.

Boring Money CEO Holly Mackay comments:

“It’s very hard for asset managers in particular to build a detailed picture of who their retail investors are, as so few buy direct. Our research confirms that brand plays a role, with larger generalist financial services brands typically having more vulnerable customers than smaller UK-focused asset management specialists."

“We can also see how the low confidence element of vulnerability plays out. 25% of vulnerable investors describe the risk profile of their investment portfolio as 1 or 2 out of 5, compared to 19% for non-vulnerable investors. This raises the question of how to best protect their long-term savings in a responsible and appropriate manner."

“As many vulnerable investors are younger, it is not always the case that these lower-risk portfolios will deliver the best outcomes for them. And who takes on the challenge of this communication to vulnerable investors with median portfolio sizes of £38,000, who will typically be priced out of advice?”

Find out more about our Vulnerable Customers Report here!