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Advisers urged to be alert to vulnerability under Covid

Advisers urged to be alert to vulnerability under Covid

Advisers have been urged to be alert to the vulnerability of their clients as the parameters of who classes as a vulnerable customer have shifted due to the pandemic, experts have claimed.

The coronavirus crisis has shut down borders, toppled global markets and put the country into lockdown as the government attempts to curb the death toll.

The practical realities of this, alongside severe stock market falls eating into people's investments, means clients not typically considered vulnerable may now need extra attention.

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Wingate Financial Planning's Alistair Cunningham said there was a “good argument” for treating all consumers as ‘vulnerable’ during this time, considering they were facing a health and economic emergency.

He said: “We now cannot go and see our clients and we’re in the middle of a health and economic crisis. That means all clients should be considered vulnerable.

“So we should do for every client what we would do for any vulnerable customer in normal circumstances — give them time to make decisions, talk to family members, encourage them to go and check previous notes which explain their financial plan and how it is prepped to deal with these scenarios.”

Mr Cunningham added he had made sure to send follow up notes and details of conversations promptly after phone calls or video chats to ensure his clients did not have time to overthink or stress too much about their finances, and had a record to look at during times of panic.

The Personal Finance Society agreed. Keith Richards, chief executive of the adviser trade body, said the sudden coronavirus crisis could have different impacts on people over a relatively short period of time so urged advisers to be alert to vulnerability.

He said: “During these unprecedented times the numbers of those most vulnerable may have changed due to changes in economic circumstances, emotional or family issues, a change in health, or a lack of access to their advisers.”

The Financial Conduct Authority last week issued guidance over customer — and customer support — identification, noting that restrictions on non-essential travel had affected firms’ ability to use traditional methods to verify a customer’s identity.

Alongside the Joint Money Laundering Steering Group, the City watchdog said firms could be “flexible” in order to verify identities remotely.

Such methods include accepting scanned documentation sent by e-mail, ask clients to submit ‘selfies’ or videos or verify phone numbers, e-mails and physical addresses by sending codes to the client’s address to validate access to an account.

Mr Richards said as a result, it would be easier for advisers to take instructions from clients or clients’ family members who were self-isolating or minimising all contact with the outside world.

On a practical level, Alan Steel, director at Alan Steel, said advisers should proactively speak to their clients and their clients’ support networks.

He said: “The regular communications advisers have had over the years will pay dividends at such a time like this.”