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There are lots of ways you can get vulnerability wrong – Wilson

by: Stuart Wilson is CEO at Air Group
  • 12/04/2021
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There are lots of ways you can get vulnerability wrong – Wilson
The notion of vulnerability, and who might be defined as a vulnerable customer, has perhaps never been more at the forefront of industry and regulatory minds as it is today.


If you have worked in the equity release or later life sector for any length of time, you are no doubt acutely aware of vulnerability, but it’s important to point out that this is not just applicable to older customers. Far from it.

Customers can be potentially vulnerable for all types of reasons, not just age.

Whether it is around mental health, a sudden unplanned change of circumstances, speaking English as a second language or being the focus of pressure from family, there are a huge range of factors that can make someone more vulnerable.

The pandemic and lockdown are a case in point – an unforeseen situation which has undoubtedly upped the potential for vulnerability.

And the regulator is obviously keen to put vulnerability firmly at the top of the financial services agenda, and rightly so.

The Financial Conduct Authority’s (FCA) guidance in this area, published earlier this year, should be a real benefit, particularly for advisory firms.

It outlines how to identify vulnerability, the needs of such customers, the skills and capability of staff in dealing with it, as well as how best to monitor and evaluate how you deal with the vulnerable.


Sensitivity required

I have to admit, this sounds easier than it is, and it will need some careful thought on the part of firms, particularly in areas such as assessing vulnerability in the first place.

After all, being vulnerable isn’t necessarily a constant situation, not everyone who has vulnerable ‘drivers’ is necessarily vulnerable, and firms will need to be sensitive in this regard.

People tend not to like being told they are vulnerable.

Advisers who simply blurt out such a view are not likely to keep those clients and we absolutely need to be mindful of the potential distress this can cause, which will only add to the client’s vulnerability.

Neither do customers tend to like it when they feel they are being formally assessed for vulnerability.

The best assessments are the ones where the client doesn’t even know it’s happening, which means the adviser being able to utilise soft questioning and deciphering soft facts before coming to their assessment.


Lots of ways to get it wrong

It is clearly a sensitive issue, and even though later life advisers might have had more experience in vulnerability, there is still much to be learnt about the way we, and all advisers, work with these clients and the sensitivities.

It is a tricky ask because while there is perhaps no one true way of getting this right, there are lots of ways in which you can get it wrong.

Air Group is working with TSF Consultants to help our members in this area, and it’s something we would also be happy to share with a wider audience, because it is likely to be of benefit for many.

All advisers should undoubtedly avail themselves of the FCA’s guidance in this area, and think about improvements they could implement, not just in assessing those customers who might be vulnerable, but how to provide them with the advice they need and deliver the right outcomes for them.

This is all about doing the very best for the client and ensuring, whether vulnerable or potentially vulnerable, you are working in the right way and getting the right results.



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