The Financial Conduct Authority's (FCA) latest review into how our industry supports bereaved customers asks important questions.
This review examines how we advisers, platforms, wealth managers and insurers support families after a client dies. Communication, speed of service, and fees are all in scope.
The findings matter. Bereavement is difficult. Research prepared for the FCA found sadly fewer than half (47%) of bereaved relatives of client's felt they received the support they needed from financial firms, leaving many families dealing with huge unnecessary stress at a time when they need clear guidance, someone to listen and practical help.
The FCA has been clear that people should not have to face confusing letters, long delays or poor service after losing a loved one. Getting this right takes much more than following a standard process. It is about creating a culture where people come before paperwork.
Culture is reflected in the everyday decisions. Consider fees. Continuing to charge the usual fees while an estate is being administered may follow existing processes, but to a grieving family this can feel terribly unfair and uncaring.
That said, the review’s lens may prove too narrow. The FCA's review begins from the point a firm is told that a client has died. But families rarely contact every financial provider straight away. They are likely experiencing deep grief, and when they are able to think more clearly their priority is most likely to be arranging the funeral, notifying the bank or making an insurance claim.
Investment accounts are likely to be considered much later. At Everest, where we support families through the practical aftermath of a death, we see this pattern constantly. Weeks, sometimes months, can pass before a wealth manager or platform learns that a client has died.
Consequently, a firm is unlikely to properly support a bereaved family through the most difficult phase of bereavement. How quickly firms become aware of a client's death deserves as much attention as what happens afterwards. That question sits largely outside the scope of the review and it is where the industry has the most ground to make up.
Bereaved families are vulnerable and are unlikely to compare different services or question recommendations. Any help provided at that point should be structured solely to support them: offered as a service to the family, never as a route to cross-sell products or gather assets.
There is a commercial reality here. Bereavement is the moment at which wealth passes between generations. Research has consistently shown most beneficiaries move their money away from the deceased’s adviser soon after the death. Firms that handle these moments poorly are not only failing families, but they are also quietly losing the next generation of clients. Handled well, the same moment can become the foundation of a relationship that lasts into the next generation.
The FCA's review, we hope, will find firms demonstrating they treated people with care, communicated clearly and acted quickly. These firms will be able to show their staff had the confidence to make sensible decisions when families needed help, rather than simply following a standard impersonal process.
In practical terms, that means reviewing whether fees should be paused or reduced while an estate is administered, equipping staff to respond with judgement rather than a script, and putting arrangements in place to learn of a death sooner - whether through nominated contacts, closer coordination with the organisations families call first, or specialist support made available to clients and their families as part of the service.
The principles behind Consumer Duty are perhaps tested most when a client dies. Bereavement is a difficult subject but not one to be ignored.
