Why it matters:

In order to deliver good outcomes to investors, we must evaluate the risk factors associated with different consumer transactions. Certain financial products or services may pose higher risks to certain groups of consumers.  We must identify and prevent any foreseeable harm.

Who is a vulnerable investor?

Determining vulnerability involves identifying individuals or groups who may be at a disadvantage in a consumer transaction owing to a range of circumstances.

As an Alternative Investment Fund Manager (AIFM), Sapphire considers various factors that can make consumers vulnerable, such as age (e.g., minors or seniors), disability, low income, lack of education, language barriers, or cognitive impairments. 

Are neurodiverse investors considered vulnerable customers?

I believe the answer is no because Consumer Duty accounts for their needs in a different way.  (Let me digress here to commend the FCA's focus on neurodiversity as vocal advocates and members of the Neurodiversity in Business forum.)  Neurodiversity appears to roll into diversity and inclusion initiatives, with rules around the type of wording used in financial promotions, as well as the use of various communication channels to address the needs of this group.

What is Sapphire doing differently?

Fund managers are required to identify groups that may be disproportionately affected by what could be deemed as unfair or deceptive practices in consumer transactions. Fund managers are also required to learn about specific vulnerabilities and challenges these consumers face.  As a result, Sapphire has implemented further screening tools and questionnaires to help identify vulnerable consumers .

Our investment managers are trained to recognise signs of vulnerability and to handle interactions with vulnerable consumers sensitively and ethically.

We changed the way we relay information,  added videos on how to invest and writing more blogs like this one, to let everyone know about what we do to address Consumer Duty, to raise awareness of relevant topics and what investors are entitled to receive.

In addition to communicating our investment opportunities via different channels, we  continuously monitor and assess the investment process, making changes to our operations based on direct feedback we receive.  We strongly encourage feedback from consumers and have added QR feedback codes to our financial promotions.

The bottom line:

Identifying vulnerability in Consumer Duty is a legal requirement and an ethical responsibility. Prioritising the protection of the vulnerable while promoting fairness and inclusivity in consumer transactions is what we strive to do in order to deliver good outcomes.

 Go deeper:

For further information on Consumer Duty, and investment managers obligations to their customers, please have a look at the prior blogs we have posted on this topic such as :

FCA 22/9: What Consumer Duty means to Sapphire

Attention IFAS / Distributors: Are you meeting the Consumer Duty July 2023 deadline?

Or check out our video on how to invest in a Sapphire fund by clicking here. 

Sapphire Capital Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN: 565716). This article is a financial promotion and is intended for UK investors only. The content is for information purposes only and does not constitute investment advice or a recommendation to invest. SEIS and EIS tax reliefs depend on individual circumstances and may change. The value of investments may go down as well as up, and investors may not get back the full amount invested. Past performance is not a reliable indicator of future performance.  Investment outcomes can differ substantially, potentially resulting in the loss of all your capital invested. Shares in early-stage companies are illiquid: you may be unable to sell your holding for several years, if at all. Investors should not rely on this article as a basis for investment decisions and must consider the illiquid and high-risk nature of early-stage investing. No warranty as to future outcome is implied nor should one be inferred. Tax treatment depends on individual circumstances and may be subject to change. Investments of this type are generally not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service if the underlying companies fail.