France: ACPR and AMF Encourage Financial Institutions to Take Account of Vulnerability of Ageing Clients

The ACPR and AMF encourage financial institutions to continue their efforts to take account of the vulnerability of ageing clients

The joint unit of the Autorité de contrôle prudentiel et de résolution (ACPR) and the Autorité des marchés financiers (AMF) has published a summary of interviews “with finance professionals on the progress of their work to take account of the specific characteristics of vulnerable ageing clients when marketing financial products.”

In 2021, following the works “conducted by their joint unit, the ACPR and AMF called on professionals to exercise increased vigilance with regard to vulnerable ageing people.”

The follow-up work carried out “in 2022 and 2023 shows that, of the fifteen or so banks and insurance companies met, the majority have taken this issue into account.”

However, the authorities have “observed wide disparities in the actions taken.”

The main findings of the follow-up work are as follows:

  • Half of the respondents have set up a ‘Vulnerability’ or ‘Senior’ champion;
  • Half have introduced the ability for advisers to seek a second opinion from a line manager or legal, compliance or risk department to implement increased vigilance around vulnerable ageing customers;
  • Two thirds of the respondents have set up specific training programmes for advisers;
  • Half plan to meet clients at key points in their lives, such as the transition to retirement, to discuss any new needs;
  • Almost all respondents use a ‘threshold age’ above which vigilance measures are implemented in the relationship with the customer.

The “vulnerability champions” in place have a variety of roles: assisting advisers “with practical issues, training sales teams, monitoring alerts on ageing customers, reviewing customer files.”

While there is a consensus among finance professionals “on the usefulness of this role, more institutions need to implement it effectively.”

The Joint Unit has noted significant progress “in the training of advisors, the implementation of practical case studies and the definition and identification of useful criteria for identifying vulnerability.”

The authorities are encouraging establishments “to pursue these actions and make them systematic.”

However, as advisors cannot be “the only shield against the risks of mis-selling, a comprehensive prevention policy is needed.”

Establishments must also be aware of factual clues “that could give rise to a warning and develop an effective prevention policy.”

While some establishments have genuinely taken “the challenges of ageing into account in their commercial approach and operational processes, others are still merely stating broad principles without translating them into action.”

Marketing strategies and sales processes need to take into account the potential vulnerability of ageing customers, based “on observed best practices such as systematic consultation with an adviser before any online subscription to complex products, vigilance in updating beneficiary clauses in life insurance policies, a second look by a line manager or a collegial analysis by a discernment committee.”

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