Advisers step up vulnerability work in wake of Covid

Advisers step up vulnerability work in wake of Covid

Financial advisers have stepped up their vulnerability work to protect older clients during the coronavirus, according to research from Key Partnerships.

The equity release referral service found that a quarter (26 per cent) of financial advisers in May were treating all their customers as vulnerable.

The survey was conducted among 242 financial advisers, including mortgage advisers and wealth managers, who refer equity release customers to Key Partnerships.

One in 10 (11 per cent) said they were assuming that people who needed to use equity release for immediate needs during the pandemic were under pressure and more likely to be vulnerable.

One in eight (13 per cent) said they had increased the monitoring each case receives to ensure the customer was supported.

Meanwhile, three in 10 (29 per cent) said their existing checks and balances were designed to support vulnerable customers.

Jason Ruse, business development director at Key Partnerships, said: “Vulnerability was a hot topic before the crisis hit and it is good to see that this remains at the forefront of people’s minds and we reviewed our vulnerability policy for added due diligence in the current times. 

“While not all older customers are vulnerable, they are an age group which is more likely to be vulnerable and self-isolation as well as the impact of the coronavirus on pensions and savings is likely to have seen more people considering their options.

“The focus on ensuring vulnerability is addressed is particularly important and the numbers of firms which have taken action or reviewed practices to ensure they are supporting clients underlines how important the issue is.”

Martin Wade, director at Access Equity Release, commented: “Within the equity release market we have always adopted the stance that every client has the potential to be vulnerable.

“Obviously when seeing clients face to face it is much easier to satisfy ourselves where this is not the case, they are fit, well, focused and know their own mind. 

"Under lockdown of course the evaluation is much harder to make and hence we have been far more cautious and placed a greater emphasis on directly involving the family as much as possible.”

Mr Wade added: “The elderly are more likely to be isolated and hence will have suffered more as a result, where we see signs of urgency or lack of clarity in need, we are taking additional time to ensure motives are correct and proportionate.

“Ultimately, there is no replacement for face to face meetings.”

In March the Financial Conduct Authority announced it had delayed the publication of its vulnerability guidance and research as a result of the coronavirus.

The regulator has consulted on guidance for firms on the fair treatment of vulnerable customers to provide “regulatory clarity” for those involved in supplying products or services to retail customers who are actually, or potentially, vulnerable.