If you were to ask someone to describe a ‘vulnerable person’, the chances are they’d focus on old age and cognitive illness like dementia. It’s positive that there is greater awareness of these issues, but vulnerability is much more than a matter of age. The pandemic and rolling lockdowns have made us all feel vulnerable.
What makes us vulnerable?
The FCA definition of a vulnerable client is “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when an advisory firm is not acting with appropriate levels of care”. Vulnerabilities can be permanent, temporary or sporadic and it might surprise you to learn that everyone will be classed as vulnerable at some point in their lifetime. Vulnerability can result from any number of things, here are some of the most important factors.
Health – mental and physical health problems, severe or long-term illness, hearing or visual impairments or cognitive disabilities.
Life events – caring responsibilities, bereavement, income shock, relationship breakdown and redundancy.
Resilience – low or erratic income, in debt, low savings, low emotional resilience, lack of support structure, job insecurity and housing problems.
Capability – lack of knowledge or confidence in managing financial matters, poor literacy or numeracy skills, poor English language skills, poor or non-existent digital skills, learning impairments.
Add a global pandemic into the mix, and you could argue that everyone could be considered potentially vulnerable right now!
What are we doing to identify and help vulnerable clients?
At LEBC we’ve always tried to identify and help clients who we believe are vulnerable by going into meetings with their wellbeing in mind from the outset, however now is a good time to redouble our efforts and focus on how we can improve the way we deal and communicate with those potentially most at-risk. We want the financial outcomes for vulnerable clients to be as good as those of our non-vulnerable clients.
Vulnerabilities can be tough to spot, especially as individuals may not realise that they are vulnerable themselves, and if we’ve identified someone as vulnerable it can be tricky to broach the subject without causing unintended offence.
Here are some of the steps we’re taking to protect our clients:
Staying in touch
One of the easiest and perhaps most important things to do is simply stay in touch, as clients are more vulnerable to negative outcomes when they are distant or disengaged. Understanding how our clients and their families have been affected by coronavirus and seeking to understand their concerns is a good starting point. In recent months we’ve increased the amount of phone calls and e-mails we’ve been sending out to keep you informed and given you more opportunities to contact your adviser.
Be Scam Aware
We need to make sure all our clients know how to protect themselves from scams. For more information on how to do this please view our blog, which we have shared in a previous newsletter.
Sending documents and obtaining valuations via our Personal Finance Portal increases the security of your data. If you have not yet signed up to this service but would like to please let us know.
Our Advisers have undertaken the Friends Against Scams training; “a National Trading Standards Scams Team initiative that aims to protect and prevent people from becoming victims of scams”. It was an eye-opening experiencing learning that 5 million people a year fall victim to scams and that people are twice as likely to fall victim to fraud than any other type of crime, which is why it is so important that, as advisers, we keep learning to protect you, our clients.
Training will also make sure all our clients are treated with the empathy and sensitivity they deserve. We recently put 40 of our advisers through some Dementia and Vulnerability training, where they learnt more about the disease and how to deal with clients who have it.
We understand that dealing with vulnerability is much more than a tick box exercise or fulfilling a regulatory requirement. We are aware of our obligations to all clients and are always trying to improve our processes to make sure we get the best outcome for all clients whether vulnerable or not. If you have questions on any of the above please do not hesitate to get in touch with your adviser, e-mail firstname.lastname@example.org or telephone 0800 055 6585.
The contents of this article are for information purposes only and do not constitute individual advice. All Information contained in this article is based on our current understanding of taxation, legislation and regulations in the current tax year. Any levels and bases of and reliefs from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. Although endeavours have been made to provide accurate and timely information, we cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.Back to News & Views
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