Meanwhile there has been a greater focus on the identification and needs of vulnerable customers by the Financial Conduct Authority. But, does the continued evolution of remote advice make it harder for advisers to identify vulnerabilities?
In the not-so-distant past, the process for equity release advisers was focused on face-to-face interactions with the customer. You would really get to know them by visiting their homes, meeting family members and explaining their options over a nice cup of tea. Likewise, valuers would always visit the property and the customer would receive legal advice in person.
However, Covid-19 has changed all that. With remote advice being essential during the first lockdown and rapidly becoming the norm, a lot of those touchpoints have changed.
So, we need to think again about the protections these interactions afforded our more vulnerable customers. Additionally, the pandemic has increased the numbers of those with vulnerabilities thanks to long-term illness, job losses and the associated financial impacts on adults of all ages and their families.
FCA instruction
In its best practice guidance, released for consultation last year, the FCA stated that businesses should be doing much more to support vulnerable customers and ensure they are treated fairly.
In it, the FCA states that there are at least 24.1m people in the UK who show at least one characteristic of vulnerability. This guidance led on from a detailed consultation that included feedback from consumer organisations, firms, trade bodies and vulnerable customers themselves.
As it turns out, with many more newly vulnerable customers in 2020, it was certainly timely.
What has become clear is that working remotely means advisers face a greater challenge in spotting the signs of vulnerability. Throw into the mix that many people may not want to admit they are vulnerable and you have got a difficult situation. It is not easy for advisers.
So, what can you do? Well, doing the right thing for vulnerable customers needs to be something that is embedded in the culture, policies and processes of all businesses.
This may mean a rethink of your existing policies and procedures to ensure the right controls are in place to help these customers as the method of delivering advice changes.
It helps if staff are trained to identify potential vulnerabilities and how best to support customers. Support could be emotional or practical, such as providing communications in braille, audio formats or larger print for those with visual impairments.
It is important that advisers fully understand the impact that certain illnesses or situations may have on someone, so that they can adjust approaches accordingly – before it becomes a bigger issue.
Remote advice
If I were to look for something positive that has come from the pandemic, I would say that it has empowered more people to use technology so they can make face-to-face contact in a virtual way.
Our customers are gradually getting used to online video conferencing platforms, with many using them to stay connected to family members or friends during lockdown.
It is also now fairly easy for applicants to have family members joining them in a meeting with an adviser, where previously geographical distance might have been a problem.
It is possible to have the broader family group of a person who is considering equity release on the same call – sometimes from around the world – so you can explain the process to the whole family and help them to understand the implications it may have.
It also allows you, as their adviser, the opportunity to spot any signs of undue pressure, to consider the family’s dynamics, and to ask open questions to gain a better understanding of the background that has led to the need to release housing wealth.
Advisers must ask themselves: does the interaction reveal any of the FCA’s characteristics of vulnerability such as bereavement, relationship breakdown, job loss or accrued debt?
As ever, it is important to keep a record of all your conversations with a customer and their family members to show the depth of conversation that you have had during these calls.
Seeing the customer during a video call may also make clear any additional vulnerabilities or needs that they may have in managing their finances. Perhaps they have hearing or visual impairments, need an independent interpreter or have poor literacy or numeracy skills.
Maybe they have little confidence or ability to manage their own financial affairs and might need the support of specialists.
Follow-up with the client
Finally, I would suggest you check in with the customer from time to time to see how things are going after the product has been arranged.
This is especially important in the instance of a drawdown product, where circumstances can change significantly between the agreement of the borrowing and the funds being accessed.
It is important to keep the door of communication open between provider and the customer, encouraging them to come forward and talk to the provider if there are any problems.
Covid and the additional vulnerabilities it has brought has meant that it is even more relevant now.
There is certainly a lot to consider, and I do not underestimate the challenges that this presents to businesses as they adapt their processes.
However, technology and the leaps forward that we saw last year in the usage of video conferencing have definitely helped, bringing choice to customers in how they receive advice in the future.
2020 proved to be a year of rapid evolution in how advice is given, and if it means we can be more rigorous in our care of the vulnerable, then I would argue it is a positive move forward.
Paul Bridgwater is head of lending at OneFamily
