The FCA’s latest announcement of its review into investment firms’ support for bereaved customers reinforces a core Consumer Duty expectation: delivering good outcomes in moments of vulnerability. At its core, this is not just about bereavement, but whether firms can evidence that support translates into real customer outcomes in practice.
The FCA’s research highlights the scale of the challenge. Fewer than half (47%) of bereaved customers felt they received the support they needed, evidencing a clear gap between firm intent and lived customer experience at a critical lifecycle stage.
The nature of this work further signals the regulator’s shift away from Consumer Duty process and compliance towards outcomes and behaviours. Firms are no longer assessed on whether appropriate policies exist, but on whether they can demonstrate that customers – particularly those in vulnerable circumstances – are consistently receiving the support and outcomes the Duty requires in practice.
Bereavement brings this into sharp focus. The FCA has made clear that this review will assess end-to-end outcomes, not individual processes, from notification of a death through to the transfer or settlement of investments, across communication, service standards, support for vulnerability and fee handling.
As one of the most foreseeable forms of vulnerability, bereavement exposes where firms fall short. Previous FCA work in banking and insurance suggests many customers faced ‘unclear processes, repeated information requests and avoidable delays. Good practice existed but it wasn’t consistent’.
The distinction is critical. A documented process does not equal a good outcome. This reflects a wider challenge emerging across Consumer Duty. Our recent Consumer Duty research found that while firms report high confidence in governance, oversight and outcomes monitoring, customer evidence remains materially weaker across the outcomes most closely linked to trust and advocacy. Bereavement provides a particularly visible example of this tension. Firms may be able to evidence process compliance but often have less certainty about the customer experience and outcome those processes actually deliver.
A real test of culture and trust
Few areas better reflect the FCA’s Consumer Investments Regulatory priority of building a stronger, outcome-driven investment culture than bereavement.
These moments quickly expose whether culture is truly embedded. Jargon heavy communications, unclear instructions or repeated requests for information, can rapidly erode confidence. What may be manageable in normal circumstances can feel overwhelming and unacceptable in periods of grief.
The FCA has reinforced, including through its Consumer Duty Year 2 Board Report feedback, that consumer understanding and consumer support are core outcomes. Firms should be able to evidence how they test communications, assess whether customers genuinely understand what they are being told, and respond where behaviours indicate confusion or friction.
Expectations on clear communication, particularly around fees, charges, risks and processes, are well established. Bereavement, however, intensifies the challenge, raising a critical question: are firms applying these standards consistently when customers are least able to navigate complexity on their own?
This is also where trust is built or lost. How a firm responds following a death is often one of the most emotionally significant interactions it will have with a customer’s family. Delays, poor communication or inflexibility at this stage can cause lasting harm.
As the FCA notes, bereavement is a “real test of a firm’s culture and key to consumer trust.” In practice, this means trust is not defined by policies, but by lived experiences. Firms that deliver clarity, empathy and efficiency at these moments will not only meet regulatory expectations but meaningfully strengthen client relationships.
What firms should be doing now
Ahead of the FCA’s findings later this year, firms should not wait for formal feedback. The direction of travel is already clear. Boards and senior leadership should challenge whether they have clear visibility of bereavement outcomes, or whether assurance is still primarily based on process adherence rather than customer experience.
Key areas to focus on include:
- End-to-end journey design
Firms should ensure the full bereavement journey is mapped end-to-end, with a clear understanding of customer outcomes, friction points, risks and controls. This needs to be done from the customer’s perspective, not simply as a series of internal process steps. - Communication clarity and tone
All customer communications, letters, emails and scripts, should be reviewed for clarity, tone and empathy. The Bereavement Journey, more than any other, highlights the importance of differentiating between communications that are technically compliant and communications that are genuinely understood. Consumer Duty has raised the standard from providing information that is “clear, fair and not misleading” to ensuring customers can understand and act on it. During periods of grief, that distinction becomes particularly important. - Service standards and timeliness
Transfers, settlements and account action processes and MI should be reviewed. Delays during bereavement are not just operational inefficiencies, they can directly translate into poor customer outcomes. - Fees and fair value
Firms should revisit how fees are applied during bereavement and ensure they can clearly evidence fair value. This includes reassessing fair value frameworks and demonstrating that charges remain appropriate in these circumstances. - Staff capability and flexibility
Frontline teams play a critical role during the bereavement process. Firms should ensure staff are appropriately trained and empowered to respond with flexibility and judgement, rather than relying on rigid scripts or standardised approaches. - MI and outcomes monitoring
Crucially, firms need to be able to answer a simple question: how do we know bereaved customers are receiving good outcomes?
This requires a shift in focus. Traditional operational metrics, such as processing times or volumes, are not sufficient on their own. Firms should identify, capture and use meaningful MI that reflects customer experience across the end-to -end customer journey, highlights friction points, and demonstrates outcomes for vulnerable customers.
This is consistent with a wider trend we identified across the market. Firms have significantly improved outcomes monitoring and MI, but many continue to rely on operational and retrospective indicators that provide assurance without necessarily explaining why outcomes are good or poor. Bereavement highlights why this matters. A case completed within SLA may still represent a poor outcome if the customer experiences confusion, repeated information requests or avoidable distress throughout the journey.
A defining moment for Consumer Duty in practice
Bereavement represents where Consumer Duty is most visible and most tested. It is a predictable life event, a clear vulnerability trigger, and a moment where firm response is most acutely felt.
The FCA’s bereavement review is unlikely to create fundamentally new expectations. Rather, it will test whether existing Consumer Duty principles are working where they matter most. In that sense, bereavement is not simply a specialist operational process. It is a highly visible measure of whether firms can evidence good outcomes when customers are at their most vulnerable.
The importance of getting bereavement right extends beyond individual cases. Our Consumer Duty research highlights a persistent vulnerability gap, with vulnerable customers reporting significantly poorer outcomes than non-vulnerable customers across multiple measures of customer experience. This suggests that while many firms have strengthened governance and oversight, the translation of those frameworks into consistent customer outcomes remains uneven. Bereavement is one of the clearest opportunities for firms to close that gap.
For Boards and senior leaders, the critical question is no longer whether appropriate frameworks, policies and controls exist, but whether they can demonstrate that those arrangements are delivering the outcomes customers need in practice. This is particularly important in bereavement journeys, where poor communication, delays and unnecessary friction can have a disproportionate impact on customers already experiencing vulnerability.
The next phase of regulatory scrutiny is no longer focused on whether frameworks exist, but whether firms can demonstrate that outcomes insight is actively shaping decisions, behaviours and customer experiences. Bereavement may prove one of the clearest indicators of whether that shift has genuinely happened in practice.
Firms that get this right will do more than meet regulatory requirements. They will build trust at a point that matters most, strengthening relationships with clients, families and beneficiaries.
How Square 4 can help
In practice, many firms find that while processes exist, they have limited visibility of how these perform across the full journey, and where customer outcomes begin to deteriorate.
Square 4 supports firms across the wealth and investment market to design, review and enhance bereavement processes and journeys so they deliver consistently good consumer outcomes. This includes mapping end-to-end journeys, identifying points of friction, and embedding practical improvements across communication, service delivery and controls.
We focus on ensuring these processes work in practice, not just on paper, helping firms define meaningful measures, identify and capture the right MI, and evidence how bereaved and other vulnerable customers are being supported. This enables firms to move beyond process compliance to a clear, data-led understanding of outcomes and areas for improvement.
To discuss how we can support your Consumer Duty implementation and your bereavement processes and journeys, contact us at hello@square4.com.
Sara Haworth – Principal Consultant
Alice Buckley – Consultant
