Ken Davy  

Advisers are uniquely able to help vulnerable clients

Ken Davy

Ken Davy

The past 12 months have had an impact on every area of our lives, both professionally and personally.

I have written, and spoken, at length about some of the positives we can take away from this period, which include innovation in tech and the introduction of efficiencies to our businesses.

I believe many of us also have a new understanding of the relationships in our lives, and will have a renewed appreciation for the support available from our friends and family. 

Indeed, a growth in community-based social projects, the Thursday night clap for the NHS, and the online #bekind initiative also demonstrated the importance that a warm and respectful word or gesture from a stranger can hold. 

However, the flip side of this is that those either without or isolated from a supportive network who are experiencing a great deal of strain or pressure; suffering from either mental or physical ill health; grieving for or caring for a relative; or in any number of other, stressful situations, may have been deeply, adversely affected by the events of the past year, rendering them vulnerable. 

Of course, treating clients who are either inherently vulnerable, or who may be experiencing circumstances that have made them temporarily vulnerable, in a way that is sensitive and fair was already part of the process for advisers and brokers. 

However, over the past few years, guidance and research from the Financial Conduct Authority has led us to think about vulnerability much more broadly: what it means to individuals, how to identify vulnerable clients, ways in which to approach sensitive conversations, finding appropriate solutions, and documenting all meetings and any actions taken. 

The FCA’s focus on this area – most recently in its publication of ‘FG21/1: Guidance for firms on the fair treatment of vulnerable customers’ towards the end of February – means that ways of working now need to be formalised into documented processes, procedures and cultures.

Just in advance of that finalised guidance, the results of the FCA’s Financial Lives survey showed that more than a quarter of UK adults are now vulnerable. 

Mental and physical health concerns are at an all-time high. With the recession, furloughing, redundancies and entire industries going into shutdown for months at a time, many others found that their financial resilience was not secure enough to protect them through this period.

What this means for you and your clients is that people who entered 2020 with robust physical, mental and financial health, may now find themselves in a completely different situation. 

And, of course, a cursory or superficial conversation may not be enough for us to discover how significant a change has occurred to a client’s circumstances.

While the majority of advisers and brokers are highly adept at getting to know their clients and identifying areas of concern, I believe that, like the role of the adviser generally, this process has never been more important than it is now.