'Ditch the suit': an adviser's take on dealing with vulnerable clients

Johnson, director of New Forest Wealth Management – a senior partner practice of St. James’s Place - said advisers are often good at speaking but it is the listening that is especially important when dealing with clients who are on the vulnerable side.

These clients require a different set of skills with a lot more emphasis on body language and how advisers portray themselves, he said.

Johnson told FTAdviser: “I do not tend to go and see my clients in a suit shirt and tie. You could have a person who has never dealt with financial advice before but has suddenly inherited money because their parents have passed and could therefore be quite intimidated.

“If an adviser then rocks up in a suit and tie and sits behind an oak panel desk, it makes the whole process less engaging.

“This is why soft skills around the language used and how we communicate with these clients is so important.”

Advisers must treat vulnerability as an important subject area in its own right and it should be given the same value as chartered qualifications, according to Johnson.

He explained that advisers must take certain qualifications in order to advise on defined benefit transfers or inheritance tax planning but the same is not true for dealing with the issue of vulnerability.

But Johnson said changing this would give advisers the opportunity to learn better practice in this area and enable them to share their own experiences. 

He said: “Most of the exams we take are knowledge and application whereas with vulnerable clients it is more knowledge, application and communication.”

Own experience

The vulnerable client space has interested Johnson for a number of years due to his personal experiences.

He was a live-in carer for his grandmother for 10 years while running a financial advice practice, therefore he saw first hand what happens when a person becomes increasingly vulnerable as the years go by.

Johnson said he saw the process of a person moving from being potentially vulnerable, to being a bit vulnerable, to then becoming angry about being vulnerable until at the end the person is incapacitated. 

He said: “I saw the journey and how that vulnerability could impact her decisions and whether it would lead to good outcomes. 

“It meant that from a financial services point of view, I became very aware that if it was true of my grandmother then it is true of all decision making and not just financial.”

According to Johnson, being a vulnerable client in the simplest of terms means they are in need of some extra support.

This means extra contemplation on the adviser’s behalf to ensure that good client outcomes are reached and that the individual has a good threshold of understanding.

“To enter a complex financial arrangement for which there is no undoing really needs some careful consideration,” Johnson said.

“It is really about acknowledging the extent that it could impact somebody and making sure you don't lose sight of getting good autonomous client outcomes to the best of your ability.”

He added that advisers should not just go ahead and do what they think is the best for their client but instead should work to get the client on board.

Johnson said: “We do not want them to be restricted from good client outcomes because of the vulnerability. We need to find a way to work with them instead and accommodate it.”

Vulnerability can also lead to people being excluded from advice, as they are mistaken for not needing this service, for example if they suffer from illnesses such as alcoholism.

In fact, Johnson said some of his vulnerable clients had highly complicated financial needs.

For example, one of his clients was turned down from getting advice on a number of occasions due to his vulnerable appearance.

However, the client has a £1.5m portfolio which needs to be managed and he is not in the position to make good decisions, therefore it is imperative that he gets advice, Johnson said.

How the advice process differs

Johnson said advisers should consider shaking up the advice process with vulnerable clients as it will never be a one size suits all situation.

For example, if someone is recently divorced or bereaved they may not be up to having long sessions.

Mr Johnson said he has some clients who tire easily and therefore sessions are broken down into shorter, bitesize pieces.

This could mean talking for 10 minutes on a particular issue and making sure it is fully understood before moving on to the next issue in a similar session the following day.

Whereas other clients prefer to take it really slow over two or three meetings and are happy for them to go on for an hour or two each time.

Mr Johnson said: “In terms of a recently bereaved client, the way the grief will impact them will change over time so there will be good weeks and bad weeks, so as an adviser I have to be patient.

“Whilst I know the outcome is going to be good for the client, I must wait until we get to a point when they are able to get on board and are able to make that right decision and engage in the advice.”

amy.austin@ft.com

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