The Association of British Insurers (ABI) has published guidance to help firms in the long-term savings market better identify, understand and support vulnerable customers.
The introduction of the pension freedoms in 2015 created new challenges for those customers who might be vulnerable, such as older people and those with lower literacy skills.
According to the Alzheimer’s Society, people who are living with dementia and their loved ones, say a challenge they always face is dealing with insurance companies.
The issues they have raised include understanding whether a policy is still valid after diagnosis, discussing dementia with people in the insurance sector who do not understand the condition and its progression, and the wording of policies being confusing or not applicable to people affected by dementia.
The ABI guide draws on examples of good practice to raise awareness across the market of how to best identify and support vulnerable customers.
Vulnerable customers include the elderly, people with mental health issues, those with physical conditions or disabilities and customers with lower literacy and numeracy skills.
It could also include those who have faced a significant life event, such as a job loss, divorce or family bereavement.
Firms can then support such customers by providing staff with a vulnerable customer policy, to ensure all front-facing employees are trained properly and are also able to refer people to other organisations with particular expertise.
Rob Yuille, assistant director, head of retirement policy at the ABI, said: “Retirement decisions are complex for everyone, but some people in vulnerable circumstances will need additional help.
“This initiative highlights that providers really want to deliver the best possible service to all customers, and take their responsibilities towards vulnerable customers extremely seriously."
IFA Susan Hill, from Susan Hill Financial Planning, said dealing with vulnerable clients is going to a bigger area for advisers in the future, as the number of people living longer increases.
She gave some examples in her own business where a conversation with a client about their own financial planning had led to her providing further advice concerning an elderly parent.
Ms Hill said: “As an adviser it is not just about working with the clients, but it is also about helping them to understand when their parents might become vulnerable as well.”
Ima Jackson-Obot is features writer at Financial Adviser