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JFSC feedback following a review of IFAs investment services to VULNERABLE persons.


Following a 2017 review the JFSC During the second quarter of 2023 assessed the extent to which supervised persons holding a class D investment business licence had complied with their regulatory obligations in terms of their provision of investment services to vulnerable persons.


The JFSC’s Oct 2019 guidance note on the provision of investment services to vulnerable persons under the Code of Practice for investment business explains that there is no set definition of a vulnerable person.

Although there is no set definition, the JFSC do say a vulnerable person can be considered as:-

  • An individual whose personal circumstances, or characteristics could leave them vulnerable to have their finances placed at risk.


 The JFSC identified findings in all the examinations. Statistics regarding the number of findings include:

  1. Two thirds of supervised persons the JFSC examined were unable to demonstrate that they had considered the vulnerable persons guidance note, contrary to the obligation to do so in the investment business code.
  2. Two thirds of supervised persons the JFSC examined were unable to show robust policies and procedures regarding conflicts of interest AND
    1. Were unable to demonstrate that they looked to avoid conflicts of interest, or
    2. Identified and appropriately managed conflicts of interest which were unavoidable.
  1. Half of the supervised persons the JFSC examined were unable to sufficiently demonstrate tailored employee training regarding vulnerable persons.


The vulnerable person thematic examination considered the conduct of supervised persons against the investment business code.

This particularly applies to Principle 2 of the Investment Business Code that requires supervised persons to have the highest regard for the interests of their clients. Paragraph 2.5 of the Investment Business Code specifically requires supervised persons to identify and ensure that appropriate protection is given to a vulnerable client.

Identifying a vulnerable person, or a potentially vulnerable person, and the reason for their vulnerability is essential for a supervised person to be able to tailor its processes and meet its obligations.

By having in place adequate and effective systems and controls, including policies and procedures to protect vulnerable customers, supervised persons are expected to prove they are observing the investment business code and giving due consideration to the guidance note.


The JFSC examined a total of 69 customer files across six supervised persons as part of the vulnerable person thematic examination. Information was requested from those six supervised persons covering a review period of 1 April 2022 to 31 March 2023.

  • A detailed overview of the examination findings is set out in section 3.1.
  • There were some findings identified during the examinations which were outside the scope of the vulnerable person thematic examination. These are referenced in section 3.2 but are not explored in detail



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