EDITION 1 | MAY 2021
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Of course , treating clients who are either inherently vulnerable , or who may be experiencing circumstances which have made them temporarily vulnerable , in a way which was sensitive and fair , was already part of the process for advisers and brokers . for advisers and brokers . However , over the past few years , guidance and research from the FCA has led us to think about vulnerability much more broadly ; what it means to individuals , how to identify vulnerable clients , ways in which to approach sensitive conversations , finding appropriate solutions and documenting all meetings and any actions taken . The FCA ’ s focus on this area , most recently in its production of ‘ FG21 / 1 : Guidance for Firms on the Fair Treatment of Vulnerable Customers ’ towards the end of February , means that ways of working now needed to be formalised into documented processes , procedures and cultures .
Just in advance of that Finalised Guidance , the results of the FCA ’ s ‘ Financial Lives ’ survey showed that over a quarter of UK adults are now vulnerable . Mental and physical health concerns are at an alltime high , with the recession , furloughing , redundancies and entire industries going into shutdown for months at a time , meant that many others found that their financial resilience was not secure enough to protect them through this period .
DIFFERENT SITUATION
New ways of approaching conversations with clients to understand their situation and state of mind may be needed , and ways in which to document your findings and the action you are going to take will almost certainly be necessary to meet the requirements of the regulator .
What this means for you and your clients is , that people who entered 2020 with robust physical , mental and financial health , may now find themselves in a completely different situation . And , of course , a cursory or superficial conversation may not be enough for us to discover how significant a change has occurred to a client ’ s circumstances .
Whilst the majority of advisers and brokers are highly adept at getting to know their clients and identifying areas of concern , I believe that , like the role of the adviser generally , this process has never been more important than it is now . New ways of approaching conversations with clients to understand their situation and state of mind may be needed , and ways in which to document your findings and the action you are going to take will almost certainly be necessary to meet the requirements of the regulator .
Concerns about one ’ s financial wellbeing can be hugely damaging to a person ’ s mental health – and vice versa , and this is where the services of a professional financial adviser are absolutely invaluable . We ’ ve long helped consumers who are in good health and secure employment to understand the importance of protection . The damage wreaked by COVID-19 , if nothing else , has clearly demonstrated the ways in which someone ’ s control over their finances can be destroyed overnight by unforeseen forces . Helping your clients to create a robust financial plan , with protection at its heart , will certainly help some to feel less vulnerable , whatever the future may bring .
Our sector is consistently agile and quick to react to changing circumstances , and we ’ ve seen some real innovation over the past year in relation to supporting vulnerable clients , and some fantastic education and training resources from providers and lenders . The SimplyBiz Group launched its own Vulnerability Hub back in June 2020 , and a programme of events , guides and updates , which has been warmly welcomed by the firms we serve , with thousands of visits to the online resource over the past six months .
I think it would be difficult to find anyone who hasn ’ t felt ‘ vulnerable ’ in one way or another during the past year and , whilst I hope it has been a temporary state for most of us , I believe we all know someone who is facing a longer-term struggle . I am sure that we are all making an effort to ‘ check-in ’ with our friends and family and , hopefully , are also receiving the same support in return . When it comes to clients , advisers and brokers are uniquely positioned to demonstrate the value in our services , which could be more important to vulnerable consumers than ever before .