Personal Finance Society  

Taskforce launches adviser guides for vulnerable clients

Taskforce launches adviser guides for vulnerable clients

The Financial Vulnerability Taskforce (FVT) has launched a guide for advisers on how to deal with the impact of sudden wealth or an unexpected wealth transfer.

The practice guide will look to provide advisers with aid in dealing with these vulnerable circumstances which the FVT said is set to increase based on forecasts of intergenerational wealth transfer figures.

It will be available to adopters of the Financial Vulnerability Charter and will help advisers consider how to help clients avoid vulnerable circumstances through life as well as how to deal with people facing vulnerable circumstances when giving advice.

FVT said financial advisers will invariably consider goals and objectives in relation to the risks in life that can create varying levels of client vulnerability – including divorce, poor health, physical impairment, or loss of mental capacity.

However, it warned that experiencing ‘sudden wealth’ can also place a client in vulnerable circumstances.

Keith Richards, chairperson of the Financial Vulnerability Taskforce, said: “It’s often overlooked that suddenly receiving a windfall can create huge challenges for people, particularly where they are already vulnerable or not used to dealing with large amounts of money.”

The taskforce said the guides will help advisers to recognise and consider how ‘sudden wealth’ can place their clients in vulnerable circumstances and provide guidance on how to amend the advice process in these “increasingly common, yet potentially vulnerable, sets of circumstances”.

The two free guides have been published in line with the Financial Conduct Authority’s expectations of dealing with vulnerable circumstances and the consumer duty.

The FCA published its long-awaited final guidance on vulnerability last February, and warned that its focus on the way firms treat vulnerable clients will not be a "one-off exercise".

In the paper, the City watchdog warned firms could expect to be asked to demonstrate how their business model, actions and culture ensured the fair treatment of all customers, including those deemed vulnerable, on a regular basis.

The guidance could also be relevant in any enforcement cases against firms under its watch, it warned.

The regulator is asking firms to offer "practical and emotional support" to frontline staff dealing with vulnerable consumers and ensure the fair treatment of this client demographic was "embedded across the workforce". 

To complement the adviser guide, the FVT has also launched a consumer facing guide for professional advisers to give to their clients or add to their website, as an aid to helping consumers understand some of the difficulties they might face. 

FVT said the Personal Finance Society has been “instrumental” in helping to create the Financial Vulnerability Taskforce, promoting its charter to all who work in the personal finance sector and consumers, especially those in vulnerable circumstances.

The Financial Vulnerability Taskforce is an independent Community Interest Company (CIC) and has over 1,000 regulated firms who have already adopted the charter.

It was established by the profession and its board operates on a pro-bono basis.