More needs to be done to spot vulnerable clients wanting equity release

Michael Lloyd

November 14, 2018

More than eight in 10 (88%) advisers said there was a need for greater education and additional resources to provide practical guidance on how to spot the signs of vulnerable clients and interact with them more effectively, equity release lender, more 2 life has found.

When asked how many of their clients they considered to be vulnerable, over half (53%) said they deemed only 1-10% of their past clients as vulnerable and less than two out of 10 (17%) thought it is generally easy to spot a vulnerable client.

Stuart Wilson, corporate marketing director at more 2 life, said: “Whilst the majority of equity release advisers confirmed in our research that they were proactive in determining whether a customer was vulnerable or not, there is a clear demand for more education and resources to be provided.

“Advisers must be confident that they are not just able to recognise vulnerable clients, but also that they are fully equipped on how to communicate with them and manage their needs accordingly.”

When asked how they determined whether a client was vulnerable or not, 87% said they enquired about a client’s personal circumstances and 82% said they tested their customers on their understanding of the products on offer if they suspected they were dealing with a vulnerable client.

Potentially due to the fact that some advisers work for very small organisations, conferring with other advisers was less of a priority with only 43% saying they spoke with others in order to confirm their conclusions.

When asked about spotting the signs of vulnerability, 91% of advisers cited mental ill-health as the biggest risk factor they looked out for, followed by low literacy, numeracy and financial capability (88%).

Over half (56%) of advisers recognised that significant financial worries might also make a customer vulnerable.

The FCA’s Future Approach to Consumers report picked up on a similar point, highlighting that a lack of financial resilience was the highest indicator for a person’s vulnerability accounting for 30% of the adults surveyed.

Physical ailments were also deemed highly as signs of vulnerability with 80% of advisers citing the onset of illness as one, and 76% citing severe or long-term medical conditions as another.

When asked how to deal with vulnerable clients, 89% of advisers said it was especially important to recognise that a client may be vulnerable – even if they don’t realise it themselves.

Meanwhile 84% thought it was important to engage with those closest to the client, such as relatives, carers or lawyers.

Nearly eight out of 10 (79%) said that recording all of a client’s communication and service needs should be prioritised to ensure that both client and the firm are protected.

To support advisers who wish to understand more about how they can identify and support vulnerable clients, more 2 life will be shortly be hosting an on-demand webinar with author and expert, Tim Farmer.

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