New research has highlighted the need for deeper broker knowledge and cross-industry collaboration to help vulnerable borrowers.

The research, commissioned by Smart Money People and facilitated by Newcastle for Intermediaries, found that while almost nine in 10 (89.1%) brokers have encountered a vulnerable client in the past year, two fifths (40.7%) never share vulnerability information with lenders.

And over half (58.2%) of brokers citing the lack of lender clarity regarding how and where to disclose vulnerability information as a key barrier. 

Nearly half of the respondents (47.9%) expressed a need for deeper understanding around identifying vulnerable customers, with brokers requesting resources such as dedicated areas on lender websites (71.8%), detailed written guidance (32.2%) and training (27.6%) to support them.

The cross-industry working group behind the research seeks to provide insight into the industry’s current understanding of vulnerability and the challenges faced during the mortgage application process.

The Financial Conduct Authority (FCA) defines vulnerability as ‘someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.’ The 2022 Financial Lives Survey revealed that 47% (or 24.9m) of UK adults showed one or more characteristics of vulnerability.

Rob Sinclair, Chief Executive at Association of Mortgage Intermediaries (AMI), says: “AMI were delighted to be asked to support this initiative on what remains one of the key areas in most firms Consumer Duty projects where greater clarity is required.   The research helps identify where the issues are and give clarity on steps which could be taken to improve support, communication and outcomes. Our hope is the industry through its trade bodies can impel firms to work together to deliver consistent policies and processes.” 

The collaborative industry survey involved 27 other lenders as well as support from mortgage clubs, and networks, trade bodies and large mortgage firms. 

The survey was distributed across internal lender broker pools, key partners, external press coverage, and Smart Money People’s broker community, with 245 brokers participating, and took place between September 30 and October 23 2024. 

The full survey can be found here.