According to a survey of 210 respondents conducted by equity release lender More 2 Life, this is a slight decrease compared with last year’s 88 per cent which suggests that the adviser community is making use of the increased support provided by lenders and other bodies.
Vulnerability is currently a hot topic for the financial services industry and in July, the FCA launched a consultation on its proposed guidance for firms on the fair treatment of vulnerable customers.
Almost all respondents to the survey said it was important to be aware and understand these issues when dealing with equity release clients.
Furthermore, 87 per cent admitted it was difficult to spot vulnerable customers – potentially due to the fact that vulnerability is not a consistent state and can present itself in a number of ways. When asked what proportion of their client bank was vulnerable, 81 per cent felt that less than a fifth fitted into this category, a slight uplift from last year’s 74 per cent and supports the idea that engagement is growing within this community.
FCA must raise the bar
Stuart Wilson, corporate marketing director at More 2 Life, noted that the issue of vulnerability had been at the forefront of the FCA’s work in recent years, particularly through its Financial Lives survey and Approach to Customers consultation, both of which he said “highlighted the great challenge the financial services industry faces when it comes to dealing with vulnerable clients”.
“Indeed, our own research shows that the vast majority of advisers admit to it being difficult to identify vulnerable clients and want more education on the matter.
“This is particularly prevalent in the equity release market where advisers are dealing with older clients and there is a need for the later life industry to work together to give advisers greater information and practical tools to help spot, record and deal with vulnerable customers.”
Wilson added: “However, it’s also important to note that customers can move in and out of a vulnerable state depending on their individual circumstances, so the FCA must continue to monitor the issue and keep raising the bar of how to deal with vulnerable clients effectively to ensure we are addressing the issue fully.”
Advisers need skills and confidence
More 2 Life is also calling on the wider lending market to raise awareness among advisers of the signs of vulnerability and to provide greater education and resources for advisers to better help these customers.
Dave Harris, CEO at More 2 Life, said: “It’s clear that advisers need more support and education to help them identify and serve vulnerable customers to ensure that they provide the right financial outcomes for their situation.”
He continued that the industry needed to work together to give advisers the “skills and confidence” to recognise signs of vulnerability, communicate with clients and manage their requirements effectively.
Harris added: “As the UK’s population ages and a greater number of older homeowners turn towards equity release as a source of income, advisers will be in a vital position to ensure they are able to help all consumers through the advice process and meet their needs in later life, including those who may be potentially vulnerable.”