FSRA’s Vulnerability Framework

Information 

No. GR0020INF Active

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Purpose and scope

The Financial Services Regulatory Authority’s (“FSRA’s”) Vulnerability Framework (“Framework”) communicates:

• FSRA’s definition of vulnerable consumers, which includes pension plan members and beneficiaries, individuals who are credit union members, and all individuals who purchase or benefit from products and services provided by the sectors regulated by FSRA;
• how FSRA will measure outcomes for vulnerable consumers in its sectors based on the definition;
• the objectives, outcomes and actions that will inform how FSRA strengthens protection of vulnerable consumers in its regulated sectors

This guidance provides information for all entities and individuals FSRA regulates.

FSRA recognizes that its supervision in the Pensions sector differs from other sectors where FSRA has responsibility for licensing and conduct oversight. For the Pensions sector, the Framework should be understood as confined only to FSRA’s activities that promote public education and knowledge about vulnerable pension plan members and beneficiaries.

Information 

FSRA’s Vulnerability Framework

The goal of the Framework is strengthened protection leading to improved outcomes for vulnerable consumers. This goal aligns with FSRA’s statutory objects, including:

• contribute to public confidence in the regulated sectors;
• promote public education and knowledge about the regulated sectors;
• promote high standards of business conduct in financial services;
• protect the rights and interests of financial services consumers; and
• protect and safeguard the pension benefits and rights of pension plan beneficiaries.

The Framework does not create any new layers of compliance obligations for regulated entities. Instead, it will inform FSRA’s supervisory, regulatory and consumer-facing activities across its regulated sectors. If necessary FSRA may also modify the Framework, rather than apply it directly, depending on circumstances.

Definition of vulnerable consumer:

FSRA defines “vulnerable consumer” as:

An individual who is at higher risk of experiencing financial mistreatment, hardship, or harm, due to various factors and personal circumstances, including health, social, and economic factors, as well as major life events.

The definition of “vulnerable consumer” is intended to be broad and flexible. FSRA recognizes that both consumers and pension plan members can have similar characteristics of vulnerability, but also that pension plan members are not directly comparable to consumers of financial services in other regulated sectors and may warrant different considerations.

FSRA’s definition recognizes that vulnerability can be temporary and situational. It also provides a basis for FSRA to work collaboratively with its regulated entities and the public interest community to identify and support vulnerable consumers in the regulated sectors, by establishing a shared understanding of who vulnerable consumers are.

The definition is supported by FSRA’s vulnerability segmentation tool, which outlines specific factors that can elevate the risk of individuals experiencing vulnerability.

Applying the definition

FSRA intends to integrate the definition into its research initiatives to measure outcomes for vulnerable consumers.

In order to apply its broad and flexible definition, FSRA will use a vulnerability segmentation tool that consists of two features:

1. Markers of vulnerability: These are dynamic factors that can impact an individual’s risk of experiencing vulnerability and can help measure and classify vulnerability in FSRA’s regulated sectors (e.g., level of financial literacy).
2. Additional considerations: These include factors that may not directly impact an individual’s risk of experiencing vulnerability (e.g., an individual’s demographic background); however, these factors can offer valuable insights into potential risks and enhance FSRA’s understanding of the profile of vulnerable consumers in its regulated sectors.

For a detailed description of the tool, please refer to Appendix A.

FSRA will be adopting this tool into its future research efforts as a method for effective monitoring and tracking of outcomes for vulnerable consumers in the regulated sectors.

The risk factors being considered in the tool can vary over time. Additional risk factors relevant to specific products, services, and target markets will also affect who may be a vulnerable consumer. It is also important to recognize that vulnerable consumers are not a static group; vulnerability can happen to anyone at any time, it can be permanent or transient in nature, and consumers may experience multiple vulnerabilities at once, resulting in increased risk of harm.

Objectives, outcomes and actions:

FSRA’s Framework focuses on three objectives:

Goal: Strengthened protection leading to improved outcomes for vulnerable consumers
	Objective 1: Foster evidence-based regulation and supervision.
	Objective 2: Improve consumer education, engagement, and awareness.
	Objective 3: Build strategic partnerships and strengthen collaboration with regulated sectors.

The Framework emphasizes the need to advance research and to promote evidence-based regulation to enhance supervision and policymaking, while also strengthening outreach initiatives and education efforts that directly reach vulnerable consumers and their advocates.

Objective 1 aims to strengthen protection for vulnerable consumers by focusing on strengthening FSRA’s supervisory and policy decision-making activities through application of research findings, and by leveraging available data, analytics and insights on vulnerable consumers.

Objective 2 aims to strengthen protection for vulnerable consumers by focusing on increasing confidence and general knowledge about the regulated sectors amongst vulnerable consumers through proactive community outreach activities as well as strengthened education efforts.

Objective 3 aims to strengthen protection for vulnerable consumers by emphasizing the need for continued engagement and collaboration between FSRA, regulated entities, and the public interest community to reinforce the importance of recognizing and responding to the needs of vulnerable consumers.

For a detailed description of the objectives, corresponding outcomes and activities, please refer to Appendix B.

Rationale and background

FSRA undertook a 60-day public consultation on a proposed approach to vulnerability in its regulated sectors from January 8 – March 8, 2024, and received 26 submissions from individuals, public advocacy organizations, regulated entities, and industry associations. Refer to Consultation on FSRA’s Proposed Approach to Strengthening Protection of Vulnerable Consumers to view the submissions.

Stakeholder feedback indicated that this topic requires attention from FSRA (e.g., establishing a clear definition, strengthening education efforts including in areas of financial literacy, and providing resources to regulated sectors to help identify and respond to vulnerabilities). However, some stakeholders noted that existing regulatory frameworks and industry practices are sufficient in ensuring protection of vulnerable consumers in the regulated sectors, and that further action is not required.

FSRA has carefully considered all stakeholder feedback in developing the final Framework, including concerns about regulatory burden and duplication. FSRA is publishing the Framework through Information Guidance, which describes FSRA’s views on the topic without creating new compliance obligations for regulated entities.

Effective date and future review

This Guidance became effective on April 23, 2025 and will be reviewed no later than April 23, 2030.

About this Guidance

This document is consistent with FSRA’s Guidance Framework. As Information guidance, it describes FSRA’s views on certain topics without creating new compliance obligations for regulated persons.

Appendices and reference

Appendix A: FSRA’s vulnerability segmentation tool