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Stakeholder Conceptions of Later-Life Consumer Vulnerability in the Financial Services Industry: Beyond Financial Capability?

Author

Listed:
  • Louise Overton

    (University of Birmingham)

  • Lorna Fox O’Mahony

    (University of Essex)

Abstract

When the newly re-constituted UK financial services regulator–the Financial Conduct Authority–was launched in 2013, it promised to adopt a new approach to its “consumer protection” objectives. This shift included articulating a new conception of consumer vulnerability, beyond narrow, individualistic, conceptions of vulnerability based on (limited) financial capability, towards a broader conception which takes account of the connection between individual circumstances, situations, and market factors in causing or exacerbating manifestations of consumer vulnerability. Drawing on new empirical research with later-life financial services stakeholders and consumers, this article examines the extent to which equity release stakeholder perceptions of consumer vulnerability align to this new regulatory philosophy, and to the realities of consumer experiences. Our findings indicate that, in contrast to the FCA’s new, broader understanding of consumer vulnerability, the stakeholders in our study tended to understand vulnerability through a narrower lens, focusing predominantly on “information vulnerability,” or on whether or not the consumer “knows what they are doing.” This conception supports the assumption that providing financial advice is sufficient intervention to ensure good consumer outcomes. This assumption is also at odds with our earlier consumer study findings, which revealed a much wider set of vulnerabilities amongst equity release consumers. We reflect on the implications of these findings for the development of the later-life financial services industry, in ways that can more appropriately serve the needs of this consumer population.

Suggested Citation

  • Louise Overton & Lorna Fox O’Mahony, 2018. "Stakeholder Conceptions of Later-Life Consumer Vulnerability in the Financial Services Industry: Beyond Financial Capability?," Journal of Consumer Policy, Springer, vol. 41(3), pages 273-295, September.
    • Handle: RePEc:kap:jcopol:v:41:y:2018:i:3:d:10.1007_s10603-018-9375-2
    DOI: 10.1007/s10603-018-9375-2
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    References listed on IDEAS

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    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. Lorna O’Mahony & Christian Twigg-Flesner & Folarin Akinbami, 2015. "Conceptualizing the Consumer of Financial Services: a New Approach?," Journal of Consumer Policy, Springer, vol. 38(2), pages 111-117, June.
    3. Adele Atkinson & Stephen McKay & Sharon Collard & Elaine Kempson, 2007. "Levels of Financial Capability in the UK," Public Money & Management, Taylor & Francis Journals, vol. 27(1), pages 29-36, February.
    4. Lorna Fox O'mahony & Louise Overton, 2015. "Asset-based Welfare, Equity Release and the Meaning of the Owned Home," Housing Studies, Taylor & Francis Journals, vol. 30(3), pages 392-412, June.
    5. Peter Cartwright, 2015. "Understanding and Protecting Vulnerable Financial Consumers," Journal of Consumer Policy, Springer, vol. 38(2), pages 119-138, June.
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    Cited by:

    1. Julia Rötzmeier-Keuper, 2020. "Consumer Vulnerability: Overview And Synthesis Of The Current State Of Knowledge And Future Service-Related Research Directions," Working Papers Dissertations 65, Paderborn University, Faculty of Business Administration and Economics.
    2. M. L. Roark & L. Fox O’Mahony, 2023. "Real Property Transactions in the Network Society: Platform Real Estate, Housing Hactivism, and the Re-scaling of Public and Private Power," Journal of Consumer Policy, Springer, vol. 46(4), pages 445-463, December.

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