New data from the MorganAsh Resilience System (MARS) reveals that consumers are more open to answering personal questions about their health and lifestyle than previously believed.
The findings come as financial firms prepare for the July deadline to assess and understand the vulnerability of all their customers, as part of the Consumer Duty regulations.
MARS users have reported positive response rates to vulnerability questionnaires, ranging from 60% when sent out cold to up to 100% when advisers explain the purpose to current customers.
Users of MARS are finding that 40-70% of their customers are classified as vulnerable, which is consistent with the findings of the FCA’s Financial Lives survey. This percentage varies by age and demographic for each firm.
Andrew Gething, managing director of MorganAsh, argues that the industry’s concerns about consumers not answering health and lifestyle questions are misplaced.
Gething said: “The latest real-world data from MARS shows the opposite – that this fear is unfounded. The majority of consumers are open to answering such questions in the pursuit of a better, more tailored service – providing information that is absolutely vital to understand consumers’ characteristics.”
Gething also dismissed the perception that consumers would skew their answers depending on the transaction, noting that the majority provide accurate data.
He believes that an acceptable response rate to vulnerability questionnaires depends on how effective the firm is in understanding potential harms and mitigating those harms to consumers.
MorganAsh launched its MARS broker tool in March 2022 to help firms understand and monitor vulnerable customers and deliver good outcomes in line with the requirements of Consumer Duty.
Through clear and consistent assessments, businesses can identify vulnerable characteristics and generate an objective Resilience Rating, similar to a credit score.
