In Focus: Vulnerability  

How to become a trusted confidant

Keith Richards

Keith Richards

Back in 2015 the City watchdog defined a vulnerable customer as: “Someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care."

Most financial advisers I spoke to back then would inform me they advised very few vulnerable customers.

Most were confident they were aware of the clients who met the regulator’s definition, as knew all about any health issues or diminishing mental capacity. They felt they had adapted their advice to ensure care was shown to vulnerable customers.

Covid-19 has shone a light on vulnerability and shown how we can all find ourselves in vulnerable circumstances in need of a safe pair of hands capable of showing us the way to greater financial security and improved mental wellbeing.

The Personal Finance Society’s independent Financial Vulnerability Taskforce recognises we need to gain a greater understanding of clients in vulnerable circumstances and know how best to recognise yesterday’s confident, financially astute individual could today be fearful of a less certain future, traumatised and anxious.

The taskforce recognises identifying clients in vulnerable circumstances is not about spotting a health complaint but understanding the state of mind and unique circumstances of every individual who seeks financial advice.

We start by recognising it is not always easy to spot if a client may be in vulnerable circumstances.

Many won’t show their vulnerability publicly – it is vital financial advisers understand vulnerability can manifest itself in physical, mental or an emotional form, is dynamic in nature (short lived or longer term, sometimes permanent, transient, recurring or fluctuating over time) and may be hidden.

It is important that we all grasp how to become a trusted confidant who understands the individual and take steps to ensure we do not make assumptions about the characteristics of individuals that could cloud our picture of what they are going through.

Clients expect to be treated fairly, regardless of their identity, age, gender, race, sexual orientation, disability, gender reassignment, religion or belief.

Clients need to know they can self-declare any vulnerability or thing they may be going through safe in the knowledge the advice they receive will be as good as that received by those who are not in vulnerable circumstances.

They need to know that if you feel they are in immediate danger of significant abuse or harm you will contact the appropriate authorities and take action to mitigate the risks they face.

I hope you will support the Financial Vulnerability Taskforce and join us in reflecting on regulatory standards, discussing public expectations, sharing your experiences of good practice and raising the barriers you face to assisting these clients.

Supporters of the taskforce will have access to subject matter experts plus a resource library from the Personal Finance Society, which contains information about the latest scams targeting clients in vulnerable circumstances, the latest regulatory guidance and links to agencies that can assist clients at risk of abuse.