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Survey flags vulnerable client concerns

5 October 2020

The majority of homeowners aged 55 and over would be comfortable if their adviser offered them additional support because they thought they were vulnerable. This is one result of a new research from more2life into attitudes amongst clients and advisers to identifying and supporting vulnerable clients.

However, close to a fifth (19%) said they do not require help, while 21% said they would only welcome this assistance if it did not slow down the application process. A quarter (27%) admitted they would question why their adviser thought they, or a family member, are vulnerable, while just under one in ten (8%) would feel ‘upset’ at being regarded as vulnerable when they are not.

More2life’s research also revealed that close to a third (30%) of homeowners over the age of 55 have felt vulnerable when making financial decisions, with more than two in five (40%) agreeing that as they get older, they are more likely to be vulnerable.

The research follows an FCA consultation on the fair treatment of vulnerable customers. As part of the watchdog’s ambitions to support vulnerable customers, they have proposed introducing a duty of care for those advisers helping these customers.

Dave Harris, CEO, more2life, said: “Vulnerability is a tricky topic for advisers and lenders as while we are committed to supporting people who need additional help, clients may very well not identify themselves as being vulnerable. So the challenge becomes helping them make the right financial choices for both the short and the long term while at the same time encouraging them to realise they may be vulnerable and that this is entirely okay.”

Harris added: “There is still a disconnect between believing that vulnerable people need more support and being vulnerable themselves so advisers are keen for more resources and tools to help with these tricky conversations. It is for this reason that we strongly welcome the FCA’s guidance on vulnerability to ensure the best outcomes for customers in the equity release market.”

More education and resources needed

According to the equity release lender, the vast majority (81%) of advisers believe there is a need for greater education and more resources to provide them with practical guidance on how to spot the signs and deal with vulnerable clients. In addition, 73% of advisers felt that there was more that the industry could do to make equity release literature cleared and easier to understand.

Commenting on the survey results, Will Hale, CEO, Key, said: “Knowing how to identify and support vulnerable customers is a crucial part of any financial adviser’s role. However, it is arguably even more important in the later life lending arena when the average customer is over seventy and the decisions made can impact choices around care, inheritance and long term-financial wellbeing.

“This new report by more2life deals with the elephant in the room for many advisers as it can be awkward explaining to a customer that you feel they should be considered vulnerable when they may not view themselves as such. Today’s report suggests that most customers would welcome having these conversations which should encourage more advisers to address this subject head on.”

Professional Paraplanner